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Housing correction underway in Canada, ‘soft-landing’ likely: bankers #yeg #yegre

Canada’s housing correction “appears to be underway,” Toronto-Dominion Bank’s chief economist said Tuesday, one day after data showed national home sales plummeted in August.

Craig Alexander and a team of economists said a combination of market fatigue, stricter mortgage lending and a deterioration in housing affordability are behind a slowdown in Canadian home sales.

The comments come a day after the Canadian Real Estate Association said home sales fell 5.8% in August from July, and were down 8.9% year over year.

“For some time now, TD Economics has been warning that the Canadian housing market was overpriced and overbuilt, setting the stage for a gradual correction to take place over the medium term,” Mr. Alexander said in a report, co-authored by economists Derek Burleton and Diana Petramala.

“The tide seems to have finally turned,” Mr. Alexander said.

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