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These are stories Report on Business followed this week.

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Canadian property values "defy gravity," as Moody's Analytics sees it.

"The average Canadian home now sells for $410,000, or well over six times median family income," says Moody's senior economist Mark Hopkins.

"Low interest rates have kept Canadian real estate affordable by historical standards, but mortgage rates are expected to rise over the next two years as monetary policy is normalized in the U.S. and Canada."

The report by Mr. Hopkins follows two fresh readings of the housing market this week, one by the Canadian Real Estate Association, the other via the Teranet-National Bank Home price index.

As The Globe and Mail's Tara Perkins reports, those readings show home prices rising.

Ms. Perkins writes that prices continued to climb in April, though home sales slightly lagged those of a year earlier.

The average price climbed by 7.6 per cent, while the MLS index price, released by CREA and seen as a better measure, still showed a gain of 5 per cent. Which has some economists fretting, though they still forecast a soft landing.

These are, of course, national numbers in a country where local markets differ widely.

Properties in most markets are overvalued by 15 per cent or less, says Mr. Hopkins, whose view compares to the 10-per-cent over-valuation pegged by Toronto-Dominion Bank.

And economists generally believe that price increases will, over the next couple of years, ease somewhat.

Mr. Hopkins, for one, says "signs of cooling sentiment are evident," noting the dip in April sales from a year ago and caution among developers.

"Our baseline forecast is for a soft landing, with prices rising below the rate of inflation for several years," he says in a report titled "Home values defy gravity."

"Risks are greatest in Toronto and Vancouver, where foreign investors have helped drive demand," he adds.

"Valuations in Calgary appear more solid, supported by Alberta's booming resource industry. Yet rapid appreciation and extensive building mean that if energy prices fall, Calgary real estate could follow quickly."

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