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A key factor driving activity next year would be interest rates, which, until recently, were expected to edge higher as Bank of Canada looked to “normalize rates.”

The bank raised the benchmark interest rate to 1.5 per cent in July, but since then appears to have reined in its enthusiasm amid a slowing economic environment.

The bank has also argued the worst in the housing market is over and markets are stabilizing.

“But, from our vantage point, it’s difficult to agree,” wrote CIBC Capital Markets analysts Benjamin Tal and Royce Mendes in a note to clients. “The central bank’s own workhorse model says it takes six quarters before the full impact of any rate hike is felt in the economy. So it’s concerning for the outlook then, that only five quarters since the first move of this cycle, let alone subsequent rate increases, we’re already seeing a slowdown in housing-related indicators.”

A rate pause would come as a relief to mortgage buyers at a time when Canadians’ household debt to disposable income is at a record level of 170 per cent, Canada Mortgage and Housing Corporation’s estimates show.

“In the most expensive cities — Vancouver and Toronto — a quarter of one percentage point on an average house does become pretty significant,” said Soper.

Another key driver in 2019 will be the looming shadow of Bill B-20, imposed in early 2018 by the Office of the Superintendent of Financial Institutions. The “stress test” required banks to assess people’s ability to pay assuming interests were either two per cent higher, or greater than the five-year benchmark rate published by the Bank of Canada. Royal LePage and PricewaterhouseCoopers predict the stress test will continue to weigh on the markets in 2019.