Last summer, a Vancouver real estate agent named Keith Roy sold his house. About a month later, he wrote a blog post about it — and set off a firestorm of criticism from fellow real estate agents. “I’m a Realtor and I sold my own home 4 weeks ago. It wasn’t too big or too small. It’s only 6 years old and still feels new. I sold because in 6 months my home will be worth less than it is today. I think it’s time to cash out,” Roy said.

His argument was really simple: the supply of homes on the market was outstripping demand from buyers. Excessive supply and falling demand would lead prices downward. But his fellow brokers felt betrayed. Some even complained that Roy had been disrespectful to the profession. Selling his home was, however, a prescient move.

Home prices in the greater Vancouver area are down 3.9 percent from a year ago, according to the Real Estate Board of Greater Vancouver. In West Vancouver, which is sometimes said to be the wealthiest municipality in Canada, home prices have fallen 5.6 percent. Sales are down 20 percent from a year ago. Vancouver is not alone. All over Canada there is fear that the country is in a housing bubble that is now in the process of popping. In March, Montreal saw sales decline 17 percent year over year, even while inventory continues to climb. In Ottawa, sales have fallen 16 percent.

“A housing correction — or, possibly, a crash — is no longer coming. It’s here,” Macleans magazine declared this past January. The bubble seems fairly obvious, even if it’s existence is still disputed within Canada. Canadian home prices are up nearly 100 percent since 2000. The price-to-rent ratios in major urban population centers are through the roof. In British Columbia, home prices rose 163 percent in the decade from 2001 to 2011, according to a study by the International Monetary Fund.

Although Canada has a reputation for having conservative banks — its banks weathered the global credit crisis without any bailouts — low interest rates have fueled a sort of mortgage and borrowing mania. Household debt has risen to a record 165 percent of disposable income. Total mortgage debt stands at $1.1 trillion. The Canadian government is attempting to engineer a soft landing. It has tightened mortgage lending rules four times in the last four years. The maximum length of mortgages is being reduced from 40 to 25 years. Home equity loans were curtailed. And the government stopped backing mortgages on the most expensive homes.

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