I realize that 99% of Canadians don’t think about whether or not Canada is in a housing bubble. But I am that 1%  who does. I think about it all the time because I know it will greatly affect that 99% of our country. We are almost half way past 2015 and I will use some facts, along with some reason, to demonstrate why we must be vigilant.

Let’s begin to look at what happened in May. Really, it’s a tale of two stories. Alberta and Saskatchewan are caught in a recession due to oil prices. Let’s look at Calgary, where home prices have dropped 3.3% in the month of May alone. As well, they have suffered their 5th straight month of sale declines. In addition, the high end homes are losing their value at the fastest percentage.

The rest of Canada appreciated to a record high in May. Price increases in major cities include Toronto with a 7.6% increase, Vancouver at 6.2%, Hamilton at 4.8% and Quebec City at 2.9%.

I used to believe in the government leading us to prosperity. As I get older, I realize that they are not too well versed in telling the truth. Here is what the Federal Government will communicate to us: The Canadian economy has a rosy outlook. Really? Our country has suffered from low growth (among other countries) since the last recession. Our Canadian households are at record levels in terms of debt. The federal auditor general has stated that Statistics Canada job openings are highly unreliable. Our unemployment rate is manipulated in order to keep it low and attractive. Our government has kept the overnight bank rate at record low’s. That included the cheapest mortgage rates around. Look, I realize the government is not trying to panic our country as much as they are trying to get re-elected. But due to this, they twist the truth. However, reality always comes back to bite us. I want our readers to be prepared. If the government was not scared of a housing bubble, why did Jim Flaherty change all the mortgage rules to make it more difficult? Why did CMHC lift their insurance premiums? Why did CMHC state that they would take a less active role going forward in housing Canadians? Why did our Bank of Canada Governor Stephen Poloz state there is no housing bubble on April 28, 2015 and then state on June 11, 2015 that he is monitoring the bubble situation? Let’s face it, we cannot really rely on the government in this particular situation.

A Canadian author Hilliard Macbeth rocked our country earlier this year when he came out with a book called “When the Bubble Bursts”. His prediction values will drop by 40-50%. Established media outlets like the Huffington Post have indicated as well about the housing crisis. What scares me is when respected opinions from the IMF and The Economist stated that Canada has the most expensive real estate. The above two institutes have very bright people working for them and they are objective.

I would like to finish with some of my own thoughts. You can call me a worrier, but I’d rather be cautious and protect my clients, friends and readers than be blindsided by the economy. As Calgary demonstrates, when Hamilton gets hit with a recession, and it will happen, Hamilton home prices will change…and not for the better. So here are some points to ponder…

• Home pries have gone up very sharply as opposed to slow and gradual
• We are vulnerable to a recession (see Calgary)
• Canadian mortgage rates are at record lows
• Low mortgage rates have caused the prices of homes to be lifted artificially higher
• In Hamilton, people are now speculating (another sign of a market top)
• Everybody thinks that real estate is an easy way to wealth
• Unbiased, professional opinions have done statistical analyses to warn us
• Home prices will not go up forever
• When the government says everything is okay, be cautious.

Well, I hope in my heart that everything will end well. Please be careful and realistic when considering buying a home in today’s market.

Robert Floris is an independent mortgage broker at Mortgage Architects in Hamilton Ontario.