Housing prices set to fall: CIBC

B.C. and Alberta the most overpriced

A new report from one of the country’s major banks says house prices in Canada are sitting 14 per cent over their "fair" value.

The report from Canadian Imperial Bank of Commerce says the average price of a home has risen 23 per cent since reaching its cyclical low in January 2009.

British Columbia and Alberta homes are the most overpriced, at 25 per cent above their fair value. CIBC establishes what it calls fair value from market fundamentals that include income, rent and demographic changes.

"This doesn’t mean that house prices are going to crash tomorrow," said Benjamin Tal, senior economist with the bank. "I’m saying they probably will go down by five per cent or 10 per cent."

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