One of the real estate markets with the greatest risk of a housing bubble is easing off the pressure. Home prices in Canada fell 0.6% a month in April, marking the first drop in two years, along with a 12.6% drop in sales, according to local real estate agents.

According to the idealist portal, experts believe that the interest rate hike decided by the country's central bank, along with the recent ban on foreigners buying houses, is beginning to have an effect on the residential market.

Home prices in Canada have increased by as much as 24% over the past 12 months and have not stopped rising since the start of the Covid-19 pandemic, according to data from the Canadian Real Estate Association. The change in trend seen in April is due, among other things, to measures put in place by the Reserve Bank of Canada such as raising interest rates to combat inflation, which is at its highest level in 30 years.

Markets argue that the interest rate, which started the year at 0.25%, will have to rise to 3% next year. The low interest rates applied during the pandemic period helped the economy get through the Covid-19 crisis, but brought the housing market close to bursting a housing bubble. And to try to solve the problems of access to housing that have been experienced in recent years, the authorities have even decided to restrict foreigners from buying houses.

"After an unprecedented few years, real estate markets in many parts of Canada have cooled somewhat in recent months, in line with rising interest rates and the buyer's effort rate," said Jill Oudil, president of the Canadian Association of Realtors.

Inflation is proving to be a global problem, compounded in a combination of high prices aggravated by Russia's invasion of Ukraine and problems in supply chains. And the financial markets have not been immune - stocks and cryptomed have been falling in recent weeks - as the authorities struggle to control prices.

Canadian consumer confidence posted its biggest weekly drop since April 2020. In the local housing market, house price declines last month were most pronounced in Toronto's smaller communities, which have seen some of the sharpest gains during the pandemic, thanks to the benefits of telecommuting.

The outskirts of cities such as Oakville and Milton saw benchmark prices fall by 5.6% in April from the previous month, while prices in the city of London (Ontario), about a two-hour drive from Toronto, fell by 4%. In addition, 80% of local markets across the country saw a monthly decline in transactions, the data show.