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Single-family house prices may be overvalued by as much as 60 per cent in Toronto, but cooling measures may take a bigger bite out of markets away from the country’s largest metro area, says a new report.

Moody’s Analytics maintains the brakes are being put on the housing market across the country and Canadians need to prepare for “several years of retrenchment” with at most as 1.3 per cent annual price growth per year over the next half a decade.

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“Exact turning points are difficult to predict, but the combination of restricted mortgage lending, taxes on foreign purchases in the largest metro areas, and the expectation of higher mortgage rates means that house prices are likely to experience a slowdown in the next few years, especially if speculative home purchases in Toronto and Vancouver are reduced or shut down,” writes Andres Carbacho-Burgos, in the eight page report, released Tuesday.