Read next: What’s next for Canada’s housing market?
In Canada, rising interest rates typically don’t tend to result in a high number of borrowers defaulting on their mortgage, perhaps because of different rules north of the border compared with the United States, he suggested.
“In Canada, there’s full recourse on the mortgages,” he said. “Back in the financial crisis in 2007-08 in the US, you always heard about homeowners who just hand their keys back to the bank when they were underwater on their mortgage, and they just walked away.
“Because of recourse in Canada, you can’t do that. If you hand your keys back to the bank and they sell the house and aren’t made whole for the mortgage that’s left, they can come after you for your other assets.”
That recourse gives homeowners a lot more skin in the game, he added, meaning that…