TORONTO -- Recent government regulations have created "unprecedented levels of uncertainty" for the high-end home market heading into the key spring buying season, Sotheby's International Realty Canada said in a report released Wednesday.

Data compiled by the realtor in Canada's four largest real estate markets predicts little deviation from ongoing trends.

Toronto is expected to continue to lead the pack in sales of homes worth over $1 million, while Vancouver's high-end home sales will continue to normalize. Calgary's market is forecast to continue its cautious recovery from the oil price shock and sales in Montreal are anticipated to grow modestly, according to the report.

But recent policy changes from federal, provincial and municipal governments remain "wild cards," said Brad Henderson, president and CEO of Sotheby's International Realty Canada.

Last fall, Ottawa introduced new rules requiring all insured mortgages to undergo stress testing to determine if borrowers would still be able to meet their mortgage obligations if interest rates climb or if their incomes decline. Such tests previously were not needed for fixed-rate mortgages longer than five years.

Also last year, the B.C. government introduced a 15 per cent tax on foreign buyers of Vancouver homes and the city of Vancouver imposed a tax on vacant homes.

"We are forecasting that we are going to continue to see the market adjust to this new reality," Henderson said of Vancouver.

Sales of homes for over $1 million in Vancouver fell to 531 units in January and February of this year, down 45 per cent from a year ago, Sotheby's said.

The luxury segment of the Vancouver market -- defined as homes worth over $4 million -- was even more dramatically affected, plunging 68 per cent from a year ago to 43 units, according to the report.

Many owners of top-tier Vancouver homes who were planning to sell are now sitting on the sidelines, Henderson said.

"The individuals involved have less pressure to sell the properties, so they can afford to take a wait-and-see attitude," Henderson said. "Arguably some of those properties would be the target of foreign buyers."

In Ontario, the provincial government has begun to mull increased regulations to temper house price growth, with Finance Minister Charles Sousa floating several ideas in recent weeks, including a foreign buyer tax and an increase in capital gains tax aimed at curbing speculation.

Sales of homes worth over $1 million increased by 87 per cent across the Greater Toronto region to 3,043 units in the first two months of the year compared to the same period last year, Sotheby's said.

In Toronto proper, sales of $1 million-plus homes rose 44 per cent year-over-year to 943 units, while sales of homes worth over $4 million were up 147 per cent from a year ago to 42 properties.

Henderson predicts that strength will continue in the spring buying season -- provided that the government doesn't implement new policies aimed at the real estate sector.

"We feel that the market is the best arbiter of supply and demand, and that government policies often have too many unintended consequences," Henderson said.

"They need to be done thoughtfully, not as a reaction to what has really become a very political issue."

Montreal saw sales of $1 million-plus homes climb 13 per cent year-over-year in the first two months of 2017 to 99 properties. In Calgary, sales of high-end homes were flat in January and February, with 64 properties changing hands.