If you look at the indicators, Canada is in a worse situation than the US back during the peak of the real estate bubble: debt levels, housing inventory, etc.
Also remember that Canada doesn't have 30 year terms to their mortgages. Most people have 5 year terms. When rates go from 3% to 6% (which is still historically low) you'll see a lot of people who won't be able to afford their payments. At least in the US you're locked in for 30 years which can reduce the likelihood of not being able to afford your payments.
The other issue is that some lenders are enforcing an 80% loan to value ratio. In other words, when you get to the end of your 5 year term and you only have 15% equity in your home (because of a drop in value), the lender may demand the other 5% (in cash) or else you don't get financing.
And in terms of lending standards, yes, Canada tightened those up, but for a while you could buy a house with 0% down and a 40 year amortization period. That did nothing but push prices even higher.
I'm not saying Canada will see a exact repeat of what happened in the US, but a correction will come and it won't be pretty.
http://www.greaterfool.ca/wp-content/uploads/2014/01/chart.p...
Also remember that Canada doesn't have 30 year terms to their mortgages. Most people have 5 year terms. When rates go from 3% to 6% (which is still historically low) you'll see a lot of people who won't be able to afford their payments. At least in the US you're locked in for 30 years which can reduce the likelihood of not being able to afford your payments.
The other issue is that some lenders are enforcing an 80% loan to value ratio. In other words, when you get to the end of your 5 year term and you only have 15% equity in your home (because of a drop in value), the lender may demand the other 5% (in cash) or else you don't get financing.
And in terms of lending standards, yes, Canada tightened those up, but for a while you could buy a house with 0% down and a 40 year amortization period. That did nothing but push prices even higher.
I'm not saying Canada will see a exact repeat of what happened in the US, but a correction will come and it won't be pretty.