The latest effort to curb housing prices in Vancouver will probably help cool activity, but the overheated market may already be cooling, leaving it more vulnerable to rising unemployment, says Fitch Ratings in a report published on Monday.

A new tax targeting house prices in Vancouver “will likely be effective” in tamping down market activity, the report says. Earlier this month Vancouver began assessing a 15% property transfer tax on properties purchased by foreigners.

The new tax is part of a broader effort to slow the country’s housing markets. “In our view, these measures might slow price appreciation. However, some cooling in the market may have already begun,” the Fitch report says.

For example, data from the Canadian Real Estate Association indicates that the number of national sales fell by 2.9% since last July, and Vancouver’s monthly sales have declined by 21.5% since they peaked in February, the Fitch report says says. “While there is no direct relationship between the number of sales and prices, we believe declines in the number of sales of high magnitudes are worth consideration,” the report adds.

If Vancouver’s market has already begun to cool, it will be “increasingly vulnerable to price declines” if the unemployment rate rises, the report says.

The estimates that home prices are more than 20% overvalued nationally in Canada when compared to growth in long-term economic fundamentals, “leaving markets increasingly exposed to downside risk.”