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.