Vancouver and Toronto will soon be calling it a night, Toronto-Dominion Bank says.

But the end of their housing “party” won’t be bad, and won’t happen until next year, the bank said in a new report.

“There is little debate that Canada’s hottest housing markets are ripe for a correction; the difficulty is predicting its timing,” TD economists said in a new outlook for global economies.

“Over the second half of 2016, some moderation in resale activity and price growth should become evident as bond yields pull off their lows and stretched affordability leads to a cooling in domestic and foreign housing demand,” they said, adding it's going strong at this point but “the party will come to an end.”

“However, barring significant new government regulatory measures to curb housing market speculation later this more, more concrete signs of a housing market slowdown are unlikely to be seen until 2017.”

Eroding affordability will take steam out of the market, TD chief economist Beata Caranci said later.

“And typically when price gains hit these levels, particularly in Vancouver, it is followed by a period where prices cool,” she said, also citing “early evidence of new supply,” which should help as well.

“That said, near-term momentum is strong so this is a 2017 story where B.C. prices are at risk of modest decline (2-4 per cent),” Ms. Caranci added.

“Given the high levels, this is pretty small and will maintain elevated levels. Ontario should move into a sideways market in 2017, also due to affordability erosion. This presumes no new measures on the policy side in taxes or to deter investment.”