OPINION: For Canada as a whole, 2015 saw the largest house price increase in four years (top chart), but only four regional markets were the drivers of that performance. At the other end of the spectrum, the collapse in oil prices has translated into house price deflation in Calgary and Edmonton, with the remaining five markets showing little price growth if not declines (middle chart). Even in Vancouver and Toronto, there was a dichotomy in the market, with condos prices up roughly 6% in 2015, while prices for other types of dwellings surged 15.8% in Vancouver and 10.9% in Toronto (bottom chart). Some believe that the story in Vancouver and Toronto is all about speculation and demand from foreigners, and nothing is fundamental. Data tell a different story. Indeed, fundamentals are playing a role, judging from job growth over the last 12 months of no less than 4.9% in Toronto and 4.0% in Vancouver. Looking ahead, deteriorating economic conditions in Canada should translate in softer job creation in the hot markets, while weak resale markets should persist elsewhere. Under these circumstances, we expect a significant deceleration in the national house price index growth rate in 2016.