A new study by a University of British Columbia professor shows homes in most Canadian urban centers except Toronto and Edmonton are priced up to 25 percent higher than they should be to balance with rents.

The study, titled "Are Canadian Housing Markets Overpriced?" was authored by professor Tsur Somerville at UBC’s Sauder School of Business, who said that the "decade-long boom in the nation’s real estate markets is over, and homeowners should brace for anything from a rapid price drop to a long, flat market," according to a report from the Canadian Broadcasting Centre.

To analyze what a balanced market price should be, researchers looked at the "relationship between house prices, rents and the cost of investing in housing in each market."

According to Somerville, Toronto is the only major market where prices are in balance with rents. "In Halifax, Montreal, Ottawa, Regina and Winnipeg, prices would need to drop by at least 20 percent to be in balance, while Calgary and Vancouver would require a 7 to 11 percent drop in prices to reach the study’s equilibrium level. But the study found in Edmonton prices are actually below equilibrium, by 8 percent."

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