VANCOUVER (NEWS1130) – A BC-based economist is predicting a much smaller drop in home prices than forecasts from two of the big banks.

Bryan Yu of Central 1 credit union says fears of a dramatic drop are overstated. He expects home sales will slow and prices will decline by about five per cent this year before rising slightly in 2013 and 2014 “unless there is another recession with large-scale job losses,” which he does not expect.

TD bank, on the other hand, has predicted a drop of as much as 15 per cent in approximately the same period.

Meanwhile, a report this morning from a Bank of Nova Scotia economist warns of “the risk of a sharper price correction” in the Vancouver and Toronto condo markets. Adrienne Warren also says “current high-rise projects are being supported by strong demand” but she says “any weakening” of that demand “raises the risk of a sharper price correction.”

Warren predicts a nationwide home-price drop of 10 per cent over the next two to three years.