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Canadian homeowners can kiss goodbye to large property price gains, a new RBC report suggests.

The housing market is headed for a “soft landing” next year, according to the bank’s latest forecast.

READ MORE: Toronto could become a ‘buyer’s market’ in coming months: RBC

The number of homes changing hands nationwide will be down nearly 9 per cent in 2018 compared to the frenzy of 2016. And as fewer sellers and buyers shake hands, prices will stay virtually flat.

RBC sees housing prices lifting a meagre 1.2 per cent in 2018, compared to an expected gain of 7.8 per cent in 2017. Prices rose 9.6 per cent on average in 2016.

READ MORE: Rising interest rates could cost the average Canadian $130 a month more in debt repayments

The last time home prices moved by less than 2 per cent was 2009, RBC data shows. Back then, property values registered a small dip, as the Canadian economy went through a mild recession amid the global financial crisis.

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This time, the expected cooling off has much to do with new housing regulation – such as taxes on foreign homebuyers in Vancouver and Toronto – poor affordability in parts of the country, and rising interest rates.

READ MORE: Interest rates could rise July 12: Who are the winners and losers?

RBC expects the Bank of Canada (BoC) to raise its trendsetting interest rate from its current level of 0.5 per cent to 1 per cent by the end of 2017. By the end of 2018, rates will likely be at 1.5 per cent, the report indicates.

WATCH: The Bank of Canada could raise interest rates as early as mid-July. Who would higher interest rates benefit and who would they hurt?

0:51 Bank of Canada may raise interest rates: Who are the winners and losers? Bank of Canada may raise interest rates: Who are the winners and losers?

Here’s the provincial home price forecast:

Ontario homeowners will feel the slowdown more than anyone else. Overall, prices will rise 14 per cent in 2017 but inch forward by a mere 1 per cent in 2018, according to RBC.

British Columbians can forget about double-digit price jumps, too. Property values there will rise by 2.3 per cent in 2017 and 1.5 per cent in 2018 – a sharp change from an 18 per cent increase in 2016.

Higher interest rates won’t halt the housing recovery in Alberta, but prices will be moving at a very slow pace there, too.

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Newfoundland and Labrador is the only province that might see an actual price decline. Prices could dip by as much as 3.4 per cent.

Rate hike could happen as soon as July 12

Like many others, RBC has moved its forecast of when the BoC will start hiking rates from early 2018 to mid 2017.

This reflects a growing consensus among economists that a first-rate increase will happen as soon as July 12, the next time Canada’s central bank will review its interest rate policy.

READ MORE: As rates rise, Canadians in debt face risk ‘beyond historical experience’: PBO

The BoC has been sending a number of signals in recent weeks suggesting that it is thinking about lifting the key interest rate. Doing so will raise the cost of borrowing throughout the economy, including mortgages.

Canadians with variable-interest mortgages will feel the pinch right away. Those with fixed-rate mortgages will usually face higher monthly payments after their loan comes up for renewal.

The Bank of Canada said on June 12 that the economy was showing signs of “moving past” the oil shock that prompted two interest rate cuts in 2015. Rates have held at 0.5 per cent since then, but many analysts expect a hike of 0.25 of a percentage point next week.

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READ MORE: Canadian provinces ranked by average consumer debt: Equifax report

Bank of Canada governor Stephen Poloz has since repeated that message, most recently in an interview with German business daily Handelsblatt on Tuesday morning.

The central banker expressed confidence that Canadian households can cope with slightly higher interest rates.

“People have a buffer in their finances in case interest rates do rise. There’s quite a resilient structure to the market,” he said.