OTTAWA - The TD Bank says home sales will be significantly lower in the second half of this year and next — and prices are dropping too.

The new outlook is in accord with previous expectations, with the exception that TD now believes the slowdown from the current hot housing market to be sharper.

The bank says with home construction stronger than expected, the added supply will soon begin affecting prices.

The first half of this year has been hotter than expected, and the second half will be cooler, the bank says.

TD says it had expected existing home prices next year to gain a modest 1.6 per cent, but now believes they will actually fall about 2.7 per cent on average.

The bank says prices will drop next year in seven of Canada's 10 provinces, with the three prairie provinces breaking the trend.

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