Drops are especially foreseen in the near future in British Columbia, Ontario and Quebec.
Average home prices in B.C. will rise 11.6% through this year, but then will drop 7.7% in 2012 and slide another 3.5% the year after, going from an average of $563,800 in 2011 to $502,500 in 2013, according to the report.
"(B.C.) home price growth has been exuberant as of late, with the average existing home costing $750,000, eroding affordability," the report said. "As such, we expect the B.C. housing market to undergo a more sizeable housing correction in 2012 than will be the case in other areas of the country."
Nationally, the average existing home price is expected to dip below 2010 levels by 2013, going from $363,700 this year down to $334,100 in 2013. The 2010 national average price was $339,000. That translates to a 7.3% rise in average home prices in 2011, followed by drops of 5.5% and 2.8% nationally over the next two years.
Only Newfound and Labrador, New Brunswick, and Alberta are expected to have no declines in home prices through 2013.
Resource-rich provinces to rise
The economies of resource-based provinces this year will outperform the rest of the country over the next two years, according to the forecast.
The more manufacturing-dependent economies of Ontario and Quebec, however, are likely to suffer in the short term because of the Japanese earthquake and continued troubles of the U.S. economy.
Resource-based economies of Alberta, Saskatchewan, and Newfoundland and Labrador, are expected to see nearly double the economic growth in gross domestic product than the remaining provinces, the report said. One reason is that crude oil has averaged US$100 a barrel in the first quarter of this year, and is expected to rise to $115 in 2012.
"The better price showing will likely bring with it higher royalties, increased corporate profits and more business investment," the report said of crude oil.
Newfoundland and Labrador's GDP dropped 10.2% in 2009, but rebounded to a national-high of 6% in 2010, and again came out on top in growth in 2011 with 4.9% growth. The national average of GDP growth this year is expected to be at 2.8%.
By 2012, however, Alberta and Saskatchewan will take the lead in growth, rising 4.4% and 4.3% respectively, according to the TD Economics report. They will also be the top two economies for growth in 2013, up 3% in Alberta and 2.8% in Saskatchewan.
After the GDP of every province, except Manitoba, declined in 2009, no province has experienced a drop since, nor are any expected through to 2013, the report said.
The employment picture
As with the GDP growth, employment growth is expected in similar areas. Alberta will see 3% employment growth in 2011, followed by Newfoundland and Labrador at 2.1%.
However, Newfoundland and Labrador's unemployment rate will still remain the nation's highest in the forecast for this year, at 13.2% compared to a national average of 7.6%.
The lowest unemployment will found in Saskatchewan at 5.1%, Manitoba at 5.3%, and Alberta at 5.8%.
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