The Canadian Real Estate Association said home sales shrank by 40 percent in February compared to last year.

The association said February sales were similar to what was recorded during the same month in 2018 and 2019, before the COVID-19 pandemic.

The annual decline in home sales in February came as the national average sale price recorded a drop of 18.9 percent compared to record figures in February 2022.

Also compared to January, CREA said national home sales rose by 2.3 percent in February, supported by gains in home sales in Toronto and Vancouver.

It said the number of newly listed properties fell by 7.9 percent month-over-month.

In the same context, Jill Oddie, president of the Real Estate Association, said February data points to the possibility of a stronger market emerging in the future.

She said in a statement: "But to repeat last month's bottom line, we won't know what the 2023 market holds until the spring. And although we don't see it yet in sales or listings data, I expect homeowners are preparing properties for the market and potential buyers are getting mortgage pre-approvals."

Sean Cathcart, the association's chief economist, also said that similarities between 2023 and 2019 continued to appear in February, with rising sales, a tightening market, and month-over-month price declines.