For decades, the majority of your clients’ lives have followed the same pattern.

Once people graduated from post-secondary, they’d start their careers, get married and buy their first house. Then, they’d have a family and likely upgrade to larger homes.

Now, however, that cycle is breaking, says CIBC World Markets economist Benjamin Tal in a new report. And that’s going to affect the housing market.

A shift in people’s buying behaviour is occurring, he notes, because “gravity-defying home valuations [and] tighter mortgage regulations have worked to price out a notable portion of the first-time homebuyers market.” As a result, many are waiting to buy homes.

Read: Home prices are overvalued by 20%, says Fitch

“At the same time,” he adds, “the value of bigger and pricier properties is rising…faster than less expensive properties—widening the gap between [people who live in] starter homes and dream homes.”

This trend could potentially deter clients from starting families until they can afford to buy large enough homes.

Read: Canadians expect housing-price surge

What’s more, Tal finds the country is split when it comes to average home prices. And this makes it hard to get a full picture of the health and future prospects of the housing market.

Even though there’s been a 5% increase in average annual home prices over the last year, he says, prices are falling in cities such as Saint John, Quebec and Victoria even while they’re rising in Toronto, Vancouver and Calgary.

Read: Comparing global home prices

Purchases are occurring on both sides, he explains, but “more than one quarter (27%) of the country’s home sales are now in cities that see prices rising by less than the current rate of inflation.”

Still, “the spread between the simple average price measure and the weighted measure (which compensates for changes in provincial sales activity) has been widening over the past eighteen months. [That] suggest[s] a growing proportion of price increases in Canada are due to activity in large and more pricy cities.”

Read: 17% of Toronto, Vancouver condos are investor-owned

For more on housing and on Tal’s market predictions, click here.

Also read:

Building permits up 11.8%

How to invest in real estate

Homeowners locking in fixed rates

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