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Canada’s housing sector will soon become a drag on growth as the number of new homes decline, according to the country’s budget watchdog.

The independent Parliamentary Budget Officer forecast in a report Tuesday that residential investment will subtract from economic growth from 2018 to 2020.

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Policy makers have been introducing measures in recent months to slow growth in the country’s two hottest markets, Toronto and Vancouver, with the province of British Columbia imposing a tax on foreign buyers in the latter. Real-estate activity in the two cities is diverging as a result. Average prices around Toronto rose 23 per cent in November from a year earlier, while sales also soared. Sales in Vancouver, meanwhile, have declined steadily, falling 37 per cent last month compared to the prior year.