![\"\"](\"https:\/\/www.livabl.com\/articles\/wp-content\/uploads\/2018\/08\/JPbombales-6766-1.jpg\")
<\/a><\/p>\nPhoto: James Bombales<\/em><\/p>\n Canadian home prices have cooled considerably over the past few months and, according to one economist, that’s unlikely to change any time soon.<\/p>\n “After the fireworks of 2016 and 2017 that propelled property values by an average of nearly 10 per cent per year, a much tamer pricing environment is in the cards for Canada\u2019s housing market in 2018 and 2019,” writes RBC senior economist Robert Hogue, in a recent note.<\/p>\n\n Hogue predicts that aggregate home prices will rise just 1.8 per cent in 2018 with a slower 0.2 per cent gain in 2019. Meanwhile, home sales will continue to underperform.<\/p>\n “Soft activity to date, prompted us to revise our resales forecast,” he writes. “We now project a steeper drop 11.5 per cent to 456,700 units in 2018 instead of the 4.3 per cent decline to 493,900 units we projected in May.” <\/p>\n That drop will be led by Ontario and BC, as both markets struggle to adjust to a new mortgage stress test introduced in January. Hogue writes that the test has had a “longer-last dampening effect on resales than we had previously assumed.”<\/p>\n Still, he predicts that strong economic fundamentals will mean a slight increase in resales in 2019.<\/p>\n