The full impact of the Bank of Canada’s interest rate hikes likely won’t be felt by homebuyers until the summer months, when many locked-in mortgage rate contracts expire, according to John Pasalis, president of Toronto-based real estate brokerage Realosophy.

“A lot of these [mortgage] rate holds are going to be expiring in the next month or so, anyone buying in July and August are going to be buying based on these higher interest rates,” he said in a television interview on Wednesday.

“We're going to see how that will impact demand and how many buyers are still in the market because a lot have pulled out in the past couple of months.”

The Bank of Canada raised its benchmark interest rate by 50 basis points on Wednesday for a second consecutive time, bringing its overnight rate to 1.5 per cent.

Following the rate decision, TD Canada Trust, Canadian Imperial Bank of Commerce, Bank of Nova Scotia, and Royal Bank of Canada announced they will increase their prime borrowing rates by 50 basis points to 3.70 per cent, effective June 2.

The impact of the central bank’s aggressive hiking cycle is already rippling through Canada’s housing market as the benchmark price of a home fell by 0.6 per cent in April from the month before, marking the first drop in two years.

Lauren Haw, chief executive officer and broker of record at Zoocasa said there’s been a housing stalemate over the past few months, with many buyers and sellers anxiously awaiting what the Bank of Canada would do next.

“The housing market pre-priced this rate hike and most people expected it, but what wasn’t expected was the signal of ongoing uncertainty around what rate decisions will look like in the coming months,” Haw said over the phone.

“I think we are going to continue this stalemate into the summer. There’s a lot of confusion in the market with what a house is worth today and what it would look like once the sale is finalized.”

But Pasalis flagged there’s a silver lining for first-time homebuyers, with higher interest rates potentially scaring off some Canadians who are only buying homes as an investment.

“A lot of investors are probably going to hit pause and not jump in,” he said.

“My feeling is overall, we're probably going to see much lower investor demand in the housing market in the in the next year.”

However, there could still be a long road ahead when it comes to improving housing affordability in Canada, according to the head of one prominent real estate investment trust.

“By far the bigger issue for all of us in housing is inflation and it’s good to see that steps are finally being taken,” said Mark Kenney, chief executive officer of Canadian Apartment Properties REIT, over the phone.

“This is a good reset for the housing market but all levels of government are at a turning point -- will they add regulation to supress pricing or deregulate the market and create more supply? The interest rate hike was a positive step in the journey but it’s not a one and done.”