Canada is at the top of a list of 10 developed nations when it comes to the health of our real estate market, but activity is expected to cool here too, according to a new report from Scotiabank.

The report into global real estate trends says the slow pace of the global economic recovery, intensifying sovereign debt worries, high unemployment and weak consumer confidence are all putting pressure on the global market.

"Of the ten developed economies we track reporting data for the third quarter, average inflation-adjusted home prices were below year-ago levels in seven, the same as in the second quarter," said Adrienne Warren in the report.

"Canada remained a notable outperformer, though activity here too shows some signs of cooling."

The report stated that Canada's continued buoyancy is "impressive" but said monthly data through November shows a levelling-off of prices since the spring.

"Ultra-low interest rates are still attracting buyers, but increased economic uncertainty combined with some recent slowing in the pace of hiring could dampen demand in the new year," the report stated.

Across the 10 countries included in the report, low borrowing costs and lower prices have generally boosted the affordability of homes, but not sufficiently to counteract the slowing economies, cautious lending conditions and an oversupply of housing in most markets.

The current weak market conditions are expected to last "well into 2012," the report says.

The following list shows the percentage change between inflation-adjusted home prices in the third quarter of 2011, and the third quarter of 2010.

• Canada: 4.8 per cent
• France: 4.4 per cent
• Switzerland: 3.3 per cent
• Sweden: -1.9 per cent
• Japan: -3.3
• Australia: -5.7
• U.K.: -6.7
• U.S.: -7.5
• Spain: -8.9
• Ireland: -14.7

Within Europe, France has the strongest real estate market, just behind Canada in terms of year-over-year price comparisons. Ireland is at the opposite end of the spectrum, with a stunning 14.7 per cent decline in home prices.

The report, however, said France's near record-high prices appear to be unsustainable in the country with high unemployment, government austerity and slowing exports.

In Ireland, severe home price declines have effectively wiped out a decade's worth of price appreciation, the report said, with average home prices down 44 per cent from early 2007 highs.

Meanwhile, in a report released Monday, Bank of America Merrill Lynch warned Toronto's burgeoning condo market could be headed for a fall.

The investment company said many of Toronto's condos (43,000 are under currently construction) are being snapped up by investors as rental properties.

But as the economy slows and the supply grows, rents will fall. That could mean investors will be unable to charge the rents needed to make a profit, and as a result will try to sell their units and get out of the market.

They'll likely be selling at a loss, Merrill Lynch said, which will drive down prices for anyone else selling property in the Toronto market.

The report said a worst-case scenario could see a 15 per cent drop in prices in the next two years.