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Those booming housing markets may make some homeowners rich and provide a short-term boost to the economy, but a Canadian economist is warning about the long-term impact on the country.

David Madani, of Capital Economics, said in a report out Friday that while the housing boom supported the economy through the oil shock in 2016, a further deterioration in housing affordability will cost the economy over time.

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“The abrupt slowdown in Vancouver’s housing market serves as a warning shot. As things stand now, the performance of the economy this year could hinge on the direction of the much larger overheated Toronto housing market,” Madani writes.

The report notes that Vancouver home sales have plummeted 40 per cent over the last 12 months and despite mortgage rates remaining very low, house prices are also beginning to drop.