OTTAWA -- Canada's real estate market softened further in May as sales and prices of existing homes declined and listings rose.

The trend happened both over the previous month and compared with May 2023, but could start to reverse after the Bank of Canada made its first interest rate cut in four years, said the Canadian Real Estate Association on Monday.

"May was another sleepy month for housing activity in Canada, although it may prove to be the last of those now that interest rates have moved lower," said CREA senior economist Shaun Cathcart in a statement.

The month saw the number of homes sold down 5.9 per cent from May last year, and down 0.6 per cent from April when seasonally adjusted.

The national average price for May amounted to $699,117, down four per cent compared with a year earlier, though up one per cent month-over-month.

CREA's benchmark price, which aims to track typical homes, was down 2.4 per cent from last year and down 0.2 per cent, seasonally adjusted, from April.

New residential listings were up 13.5 per cent nationally from last year, and up 0.5 per cent from April when seasonally adjusted.

The regional pictures vary considerably though, with sales in Greater Vancouver down 19.8 per cent compared with a year ago and Greater Toronto down 22.2 per cent, while sales in Edmonton were up 19.7 and Winnipeg activity was up 14 per cent.

Elevated borrowing costs and Bank of Canada uncertainty kept buyers on the sidelines in May, but that could start to change after the central bank's June rate cut, said TD economist Rishi Sondhi in a note.

"We're expecting a firmer performance in June, amid a decline in bond yields," he said.

"Moving forward, further rate relief is likely in the cards, which should set the stage for a stronger second half of 2024."

This report by The Canadian Press was first published June 17, 2024.