Vancouver’s detached home prices will fall 20 per cent over the next year as the number of homes changing hands in the city continues to plunge, National Bank Financial said in a report on Friday.

“In the case of Vancouver, we think a price correction will begin soon,” National Bank economist Marc Pinsonneault said in the report.

While a correction of that magnitude sounds dramatic, the bank characterizes it as “moderate” given how high prices have climbed in the city.

In his report, Pinsonneault said Ottawa’s new mortgage rules will have a cooling effect, but the impact “should not be over-estimated.”

Indeed, the Vancouver market was already coming off its torrid pace of home sales before the new measures, and even the 15-per-cent tax on foreign buyers kicked in.

Pinsonneault cites a number of other catalysts for Vancouver’s slide, including prices soaring out of reach for the some buyers, new minimum down payment rules for homes over $500,000, and B.C.’s introduction of a three-per-cent tax on the value of homes sold for more than $2 million.

“And finally, China’s anti-corruption campaign is suspected of crimping the flow of capital from that country,” the report said.

Across all property types, National Bank forecasts a 10 per cent price correction for Vancouver, with attached homes falling nine per cent and condos pulling back five per cent in the next 12 months.

The Toronto market, the report notes, is now “red hot.”

While Pinsonneault predicts home sales are about to slow in Toronto, the tight supply will limit the slide in prices to just three per cent next year.

Among the catalysts for a Toronto sales slowdown: high prices pushing first-time homebuyers out of the market and rising mortgage rates as a consequence of new regulations from Ottawa, he said.