Globe And Mail Headlines Bearish Warning - "Rate hikes could spark house price collapse"

We agree that the RE market is vulnerable to a collapse; we don’t think that rate hikes are absolutely necessary to bring that about. The market will begin to collapse under its own weight, and price drops will beget further price drops as sellers stampede. Rate hikes would speed the process but aren’t necessary.
It may be a landmark to have the G&M headline even the possibility of a ‘house price collapse’. -vreaa

Excerpted from G&M 3 Feb 2011 -
“Any move by the Bank of Canada could “easily” cause house prices to collapse, Capital Economics warns in a bleak report that suggests the Canadian housing market is likely to suffer the same sort of crash that has plagued countries such as the United States.”
“Even small rises in official interest rates have been shown to have a big effect on homeowner confidence in other countries under similar circumstances as they can change perceptions towards the housing market very quickly,” said economist David Madani. “If the Bank of Canada does resume its monetary tightening this year, this could easily prove to be a tipping point for a house price collapse.”
“Capital Economics also warns that a crash in prices could cost Canada Mortgage and Housing Corp., which insures high loan-to-value mortgages, to lose as much as $10-billion.”