The Quebec Professional Association of Real Estate Brokers says Montreal's housing market shifted last month as sales dropped 20 per cent year-over-year and active listings rose by 37 per cent.

The association says sales for the month of August totalled 2,681, while active listings hit 13,715.

Charles Brant, director of the association's market analysis department, says a "drastic" change is playing out in the market because August is usually characterized by a lower volume of properties than most other months of the year. 

He says rising mortgage and interest rates are slowing down the rate of transactions as inventory is building up, causing the market to rebalance, but in a more gradual manner than other Canadian regions.

His association also found the median price of single-family homes rose by five per cent year-over-year to reach $525,000, while condos edged up three per cent to $385,000 in the same time frame.

However, median prices for single-family homes and condos were lower in August than in July.