Those still looking for what might trigger a major house price correction in Canada need look no further than Vancouver's housing bubble, where house prices have already begun to deflate. The sudden drop in home sales, which predates the recent tightening of mortgage rules, has coincided with a rising trend in properties for sale. Against this backdrop, we doubt that low interest rates will entice buyers to come back. Overall, these growing demand and supply imbalances suggest that housing valuations will continue to deflate this year.
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