Waterloo Region real estate prices are down on a year-over-year basis but up on a quarterly basis, according to the Royal LePage House Price Survey.

The average cost of buying a home in the area was around $799,000, the report noted.

On Wednesday, the Bank of Canada announced it was raising interest rates by 25 basis points, which is lifting the cost of borrowing to heights not seen in two decades.

It is unclear whether this will be the last rate hike as some experts predict there may be more to come in the fall.

Mike Milovick, a local broker, predicts that if interest rates do continue to climb, it will likely slow down the market for first-time buyers but may not slow those who are looking for an upgrade.

In a release, he also noted that rising rates could slow sales but realtors don’t believe it will cause prices to drop drastically.

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“Kitchener-Waterloo’s housing market has become more balanced over the last several months, with a much-needed increase in inventory levels and a slight slowdown in sales,” he stated.

Across Canada over the second quarter, the aggregate sales price dropped by .7 per cent year over year to $809,200 but much like Waterloo Region, prices were up in comparison with the first quarter.

Royal Lepage says it has revised its forecast for the aggregate price of a home to increase 8.5 per cent nationally in the fourth quarter of 2023.

It made the move after a stronger-than-expected amount of activity and price appreciation over the first six months of 2023.

The agency notes that some people have been forced to alter their expectations because of rising interest rates — meaning they may have had to choose a smaller house or a different location for their home — but they are still looking to buy.

Long-term, the company does not see prices dropping as there are a few housing starts and immigration to Canada is at a record pace.

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