What goes up must come down, or so they say; this hasn't traditionally been the case for housing prices in Toronto.

And yet, in the fallout of a global pandemic that pushed the cost of living in The GTA to historic highs, we are now seeing housing prices decline — albeit not to as low as they were before the mandatory work-from-home era.

TD Economics' Rishi Sondhi predicts that average home prices across Canada could fall by 20 to 25 per cent "on a peak-to-trough basis" from the first quarter of 2022 to the first quarter of 2023.

"Reflecting their affordability deteriorations, steeper declines are forecast in B.C and Ontario while more middle-of-the-road retrenchments are likely in Alberta, Quebec, and the Atlantic Region. Meanwhile, we expect prices to hold up better in Manitoba and Saskatchewan over this period," reads a report authored by Sondhi as released Monday.

"Our forecasted decline in national home prices would only partially retrace the 46% runup over the course of the pandemic. As such, our forecast can be more aptly described as a recalibration of the market, instead of something more severe."

While "recalibration" may be an appropriate term for some parts of the country, the TD report warns that prices won't fall equally. They didn't rise that way, after all.

"Home prices have fallen by the most in Ontario and B.C. — two markets which saw rapid affordability deteriorations during the pandemic. What's more, elevated investor demand in Ontario left it more vulnerable to a correction," writes Sondhi.

"Remote work and the desire for larger living spaces prompted buyers to bypass larger urban centres for nearby suburbs or exurbs. Some chose to locate even further away (while some left their home province all together). These behavioural shifts caused a shock wave to price growth in markets further afield to the larger centres within B.C. and Ontario, that is now deflating faster than in the major markets."

Indeed, sales and prices are tanking fast in the suburbs and outlying regions of Toronto, where homes skyrocketed in value amid the pandemic. And the home types seeing price shifts in both the 905 and 416 are reflective of this same trend.

The TD Economics report notes that single-family detached homes have dropped by 7 per cent over just a few months, while "condo prices have held up better."

"This reflects the steeper erosion in affordability for detached units during the pandemic. It is also similar to the 2017-2019 experience, where a host of macroprudential measures (i.e., Ontario's Fair Housing Plan, B-20) and rising interest rates cooled detached markets following their steep affordability deterioration, while condo prices increased," reads the report.

"Unlike the 2017-2019 period, we think that condo prices will drop in coming months although likely not the same extent (or perhaps duration) as their single-detached counterparts... Note that condo affordability also worsened significantly during the pandemic."