While the average home prices in most provinces and territories have declined significantly since peaking in February, many markets are still experiencing year-over-year price increases. According to the latest data released by the Canadian Real Estate Association (CREA), major markets such as the Greater Vancouver area, Toronto, Montreal, and Calgary saw an increase in average home prices between September 2021 and September 2022. However, smaller real estate markets outside these hubs experienced higher annual growth rates comparatively. In this regard, Shawn Cathcart, Chief Economist at CREA and Director of Housing Data and Market Analysis, said this is because rising interest rates have a greater impact on home prices in larger, more expensive markets. Cathcart also told CTVNews.ca in an interview on Wednesday: "Interest rates have a significantly larger impact on places where the price-to-income ratio is much higher. People need to borrow closer to stress test limits [in the more expensive markets]." Cathcart added that areas which saw home price increases during the pandemic, such as Ontario and British Columbia, are now seeing their annual gains shrink as buyers face higher stress test rates. On the other hand, the chief economist said affordable markets like the Prairies and the Maritimes may not have seen the same gains, but have done better at holding onto them. Likewise, in Victoria, British Columbia, for example, the average home price increased by 15 percent from September 2021 to September 2022. During the same period, the average home prices in Saguenay, Quebec, rose by 13.9 percent. Meanwhile, residents of Yarmouth experienced the highest year-over-year growth of any real estate market in September 2022 at 21.7 percent. These figures are benchmark prices, calculated to reflect price trends based on the majority of homes in a given area. However, such types of price gains are unlikely to continue as rising interest rates continue to push housing prices down, Cathcart said, adding: "These annual gains are shrinking rapidly with each passing month and last month (October) may be the last you see many markets still posting year-over-year gains."