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TORONTO — A new study suggests the two hottest real estate markets in Canada appear to be headed in different directions, as Vancouver softens and Toronto looks to maintain its momentum.

In a report published Tuesday, TD Bank said Vancouver has started what is expected to be a modest correction, which will be reinforced by the recent implementation of the land transfer tax on non-residents.

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“Home prices are projected to decline by about 10 per cent in the region by mid-2017, before stabilizing later in the year,” TD said.

However, even with a drop of that size, the bank noted that prices will still be well above were they were just one to two years ago.

A 15 per cent property transfer tax on foreign buyers came into force this month in Metro Vancouver. The B.C. government brought in the tax in hopes of helping to improve home affordability.