Despite expectations that a decrease in interest rates might drive homebuyers to leave the margin, a new report clarified that the Bank of Canada's reduction of the key interest rate by a quarter point last month did not lead to an increase in demand.

The latest home price survey from Royal LePage released this Thursday, which details market trends across Canada in the second quarter, indicated that demand still exceeds supply in the Prairies and Quebec, but Toronto and Vancouver experienced slower-than-usual activity this spring.

Phil Soper, President and CEO of Royal LePage, stated that prices remained stable in Canada's largest markets.

Soper said in a press release: "This spring, with anticipated significant bank interest rate cuts, we saw some buyers racing to close deals before the expected rise in demand." However, when the first cut finally came in early June, market response was lukewarm.

A survey conducted by Royal LePage through Leger earlier this year indicated that 51 percent of potential homebuyers would resume their search if interest rates fell, but only 10 percent said a 25 basis point reduction would bring them back to the market.

About 18 percent stated they were waiting for a cut between 50 to 100 basis points, and 23 percent said they needed to see a reduction of more than 100 basis points.

Soper confirmed: "It is not surprising that a quarter-point interest rate cut did not significantly improve the affordability picture."

"The story that the market tells, with interest rate cuts reaching the level of a material reduction in borrowing costs, should be completely different."

The total national home prices rose by 1.9 percent year-over-year to $824,300 in the second quarter of 2024, also reflecting a 1.5 percent increase from the first quarter, according to the report.

This figure was compiled from the company's national and regional real estate data across 64 of Canada's largest real estate markets.

When breaking down the price by type of housing, the national average price for a detached single-family home increased by 2.2 percent year-over-year to $860,600, while the average price of a housing unit rose by 1.6 percent to $596,500.