A new report issued by RBC said that high interest rates will continue to restrain homebuyers in the new year, except in Ontario and British Columbia.

The report, released on Thursday, also said that those purchasing properties in Ontario and British Columbia in 2023 will have a stronger impact as conditions in these provinces continue to favor buyers rather than sellers.

In the report, Robert Hogue, senior assistant economist at RBC, said that real estate conditions nationwide appear reasonably stable with sales.

Hogue also pointed out that this is especially true in many markets in Ontario and British Columbia, which have started operating outside the balanced zone.

Sales in Vancouver, Victoria, Fraser Valley, Toronto, Ottawa, Hamilton, London, and Niagara are witnessing a sales-to-list ratio close to 0.40, which Hogue calls the minimum where buyers have a greater influence on prices.

Property values in Toronto and Vancouver have also declined, with Hogue saying that the trend of reversing some of the huge price gains is likely to continue in the short term. He said that the price correction is largely the result of the overshoot earlier in the pandemic when local buyers faced a sharp decline in affordable properties.

Other markets in Quebec and Atlantic Canada are currently operating at historically low levels.

On the other hand, the report said that housing markets in the Prairies remain somewhat strong, with resale activity in Calgary, Edmonton, Saskatoon, and Regina remaining much higher than pre-pandemic levels.

Also, home sales and prices have declined this year as rising interest rates increased borrowing costs for Canadians.

Major banks in the country had raised interest rates as the Bank of Canada raised its key interest rate seven times since March in an attempt to control inflation.