Few economists doubt that a correction is looming for the Canadian housing market. The only real arguments surround the timing and how bad it will be.
In an attempt to predict when the housing price decline will occur, we can assume that stress on the household balance sheet will first become apparent in broad retail spending. The last payment a Canadian homeowner is going to skip will be the mortgage. Reduced spending on luxury items, new cars, dining out and Christmas presents is likely to come first.