Yes when prices are averaging $188K sellers can refuse to sell. But when the same person buys a home, on the same income, for $922K, well, they might not have a choice. It might be the bank that comes and takes your property and sells it. This whole notion that "Canadians can't walk away from property" is overblown. In Canada and the US, the bank can take possession of your property and sell it regardless of what you want, if you fail to pay the mortgage on time. It's just in Canada the bank will come back and sue you for any additional losses.

In Newfoundland, you might be looking at a $30K correction. That is less than half the average household income of one year. The same 30% correction in Toronto is $300,000. That's 5 years income and would probably take an average home owner 30 years to save that much money. Of course when you have a $300K loss, why not $500K? It destabilizes everything because of the number of defaults.

If mortgage rates rise 2% payments rise 23%.