Some experts say they aren't yet seeing other symptoms of froth such as speculative buying, looser lending standards or a run-up in land prices. Canada's central bank and finance ministry say there isn't currently any reason for alarm. But some economists who are concerned point out that home prices are rising far faster than other measures of economic health.
Another possible danger: Because Canadian banks typically reset adjustable-rate mortgages every few years, those who are buying now at low rates will likely see increases soon.
TD Bank forecasts suggest the rate to which many Canadian mortgages are pegged, the prime rate, could nearly double by the end of 2011.
The Bank of Canada warned in its December report that if interest rates increase as expected, by mid-2012 about 9% of Canadian households could have so much debt that they'd be "financially vulnerable."
In Canada, nearly all mortgages have rates which adjust at least every few years, since the overwhelming majority of us choose a term of five years or less.
Currently, rates on some loans have fallen to 2% or lower.
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