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Tamsin McMahon

Analysts have been calling for Canada's housing market to engineer a "soft landing" since the onset of the 2008 financial crisis. And for the most part, Canadian housing prices have just kept on rising.

But with the fallout from low oil prices only starting to sink into Alberta's housing market, new mortgage rules from the federal Liberal government and the U.S. Federal Reserve raising interest rates for the first time in nearly a decade, Canada's housing market may have finally met its Waterloo.

The most telling sign the housing market is unlikely to churn out this year's 8.4-per-cent average national price growth again in 2016 is the change in tone from the Canadian Real Estate Association (CREA), the lobby group that represents the country's Realtors.

In March, the association put out a forecast predicting housing prices in Alberta would suffer a short-term drop before rebounding toward the end of the year and then rising a further 2.4 per cent in 2016. Implied in that assessment was the idea that oil prices would recover and that Alberta's energy industry was ready to ride out yet another boom and bust cycle. Toronto and Vancouver, meanwhile, were poised for moderate housing-price growth, the organization predicted.

Instead, housing prices in the Toronto and Vancouver regions have soared this year on the heels of falling interest rates, higher discretionary income from cheaper gas prices and what many believe is an influx of international money taking advantage of the falling loonie. Meanwhile, Calgary, Edmonton and other oil-exposed markets are in the midst of a full-on correction.

Prices were down in five of the 11 cities that make up the Teranet-National Bank housing-price index. The two organizations said their index has never recorded a 12-month price drop in more than five cities all at the same time in its 16-year existence, not even during the global financial crisis. That could easily become a reality next year. More importantly, prices have been sinking in markets far removed from the energy sector, including Ottawa, Halifax and Quebec City.

Given the bleak reality facing much of the Canadian housing market, CREA updated its forecast in mid-December, acknowledging that an oil price rebound was likely not in the cards and predicting housing prices would fall 1.9 per cent next year in Alberta, with four other provinces also seeing declines. Housing prices will continue rising in Toronto and Vancouver, but not at the double-digit rates seen this year. Nationally, CREA now expects housing prices to grow by just 1.4 per cent next year, far slower than what the market has seen in 2015.

Exacerbating the overall economic weakness in many parts of the country are a constellation of changes that will make it harder for borrowers in expensive markets to get access to cheap mortgages.

The federal government's move to boost down-payment requirements was aimed mainly at cooling the region around Toronto and Vancouver, which now make up one-third of all housing sales. Likewise, plans by the Office of the Superintendent of Financial Institutions to require lenders to shoulder more of the financial risks of government-backed mortgages are also targeted at the frothiest local markets.

At the same time, the U.S. Fed rate hike could push up rates on five-year fixed mortgages in Canada, which are more closely tied to bond yields than they are to the Bank of Canada's overnight rate. Taken together, the changes all point to a less frothy housing market in 2016.

Granted, there is plenty of reason to be cautious about calling for a national housing market correction next year.

The Liberals' changes to the down-payment rules are less drastic than the sweeping restrictions to mortgage financing the previous Conservative government implemented between 2008 and 2012. The market bounced back from those far more draconian changes in four to six quarters, according to an analysis from Toronto-Dominion Bank.

TD predicts the Fed rate hike will boost Canadian fixed-mortgage rates by only about 0.35 percentage points. That's a significant shift from the falling rates that mortgage borrowers have been used to, but one that will translate into a relatively small increase in monthly mortgage payments.

In raising interest rates for the first time in more than a decade, the Fed also signalled that it expects rates to rise very gradually, not reaching a "normalized" rate of 3.5 per cent until the end of 2018. Bank of Canada Governor Stephen Poloz has also made clear he has little desire to follow the lead of the U.S. in raising interest rates any time soon. That means Canadian borrowers can be fairly confident that low interest rates are here to stay for some time yet.

Finally, the sinking loonie will make Canadian properties more attractive to both foreign buyers and Canadians looking to cash out of U.S. properties that they scooped up at a bargain after the 2008 financial crisis.

So, perhaps those who have spent years calling for a soft landing will have to wait a little while longer.