An end to rapidly rising home prices may be in sight as sales across Canada's four largest markets begin to soften and price growth starts to slow.

A new report from RBC Economist Carrie Freestone found that April home resales in Montreal, Toronto, Vancouver, and Calgary all trended downwards month over-\ month. Montreal's sales took a small dip of 2%, but the other markets tumbled significantly with Calgary's sales falling 17.1%, Vancouver's by 22.3%, and Toronto's by a staggering 26.2% -- the sharpest single-month decline since the market correction in the late 80s.

"All evidence points to the Bank of Canada’s rate tightening cycle starting to have an impact, as recent data released from Canada’s four largest housing markets show early signs of softening demand," Freestone wrote in the report.

READ: Early Data Shows GTA Housing Prices On a "Rapid Decline"

In March and April, the Bank of Canada raised its Overnight Lending Rate by 0.25% and 0.5%, respectively. Further raises are expected throughout the year with some predicting hikes as high as 1% to come as soon as this summer. Although the Bank's rate is still sitting at a relatively low 1%, homebuyers are already feeling the financial crunch after the two raises.

As sales dropped off in April, so did the rate of price growth. The composite benchmark price in Vancouver, for example, rose just 1% in April -- half the average pace seen in the six months prior. And in Toronto, prices declined for the first time since the 2008 recession. In fact, the latest numbers from the Toronto Regional Real Estate Board revealed a 3.5% month-over-month drop in Greater Toronto Area home prices, bringing the average home price down to $1,254,436.

Coming Down From the Peak

This trend of slowed growth is expected to continue, Freestone says, noting that in Toronto and Vancouver, "both regions appear to have achieved peak growth in January."

READ: "We See Prices Peaking This Spring": Interest Rate Hikes a Game Changer

"With the Bank of Canada continuing to hike rates quickly and aggressively, we may have already reached peak prices in Toronto (and will soon be showing signs of prices trending down in other major markets)," the report reads.

April also saw a drop in the number of Canadians listing their homes. And the properties that are listed are sitting on the market for longer. Toronto, Montreal, and Vancouver all saw their sales-to-listings ratios fall in April, bringing them towards a more balanced market. Calgary, on the other hand, has actually seen its sales-to-listings ratio increase, keeping it solidly in seller's market territory.

Even with these drops in sales and the easing of price growth, Freestone says that affordability issues will continue to burden buyers in Canada's major markets as higher mortgage rates push aspiring homeowners out of the market.

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