The average price of a Canadian home has increased by more than five per cent in the past year, according to the Canadian Real Estate Association.
The realtor group says the average home sold went for $398,618 in August.
But for the first time in years CREA is forecasting a decline in house sales next year, and a price increase of a mere 0.7 per cent, saying the market will peak in the fall of this year.
As has been the case for several years, CREA says hot markets in Vancouver and Toronto are skewing the national average higher.
Toronto home prices increased almost eight per cent and Vancouver prices rose more than five per cent in the past 12 months.
Calgary's market is also booming, with prices up by almost 10 per cent in the past year.
Taking the two cities out of the calculations, the average Canadian home is worth $324,738, up about four per cent in the past year.
The volume of homes being sold is also higher, according to the realtor group. It says sales activity rose by 4.3 per cent in the first eight months of 2014 compared to last year, still in line with the 10-year average.
In a separate release, the realtor group also ratcheted its sales forecast for the year higher up to 475,000. That's 3.8 per cent higher than 2013's final figure, and up from the 463,400 that CREA was expecting in June.
But while prices are rising, they're not rising as quickly, the agency says.
Capital Economics analyst David Madani says the winding-down is already underway.
"Certainly the market is softening in Quebec and east of Quebec, the Atlantic provinces. Alberta is the only province that is if anything really strengthening right now,``he told CBC.
There are three big problems. First, that home prices are way out of whack relative to people's incomes. Second, there's too much building going on. And third, consumer debt are high and vulnerable to rising rates.
Madani has predicted a slowdown in the Canadian housing market for the past three years, without being right. But he`s still at it.
"A market correction of the housing market of up to 25 per cent – that will be spread over a few years," he said.