Intriguing report from the CBC:

A recent report from the Organization for Economic Co-operation and Development that revealed Canada has the third most overvalued real estate in the developed world offered few surprises for analysts who say the market is heading for a price correction.

Many say the signs are already evident — home sales are slumping, demand is down and housing prices will likely follow suit. As for when, how far or how hard prices will fall, that still remains a guess.
Check out our interactive map tracking house prices across Canada

"The housing market is an accident waiting to happen. If there is some sort of macro shock, there's a lot of dead air where house prices are now and where historically they should be," said Ben Rabidoux, creator of the blog Economic Analyst, which looks into housing and mortgage trends. "And there's a sort of saying that a market waiting for an accident to happen usually finds its accident. And that's how I would describe it."

The OECD report used two housing measures — the price of the average home compared to what it could be rented for and the home costs compared to the average salary.

The report found that based on rents, Canadian real estate is overvalued by as much as 60 per cent and in terms of prices to incomes, real estate is still as much as 30 per cent overvalued.

"There is no denying we're overshooting, vis-a-vis rent, vis-a-vis income, vis-a-vis demographics. So the OECD is not adding anything here to the debate," Benjamin Tal, CIBC deputy chief economist, told CBC News. "That's old news. The interesting question is not that we're overshooting, it's what will be the corrective mechanism, namely what kind of mechanism will we see bring it back to normal."