I think you are kidding yourself if you think Alberta is immune. There was an article published earlier this year discussing the debt levels of those who bought in Alberta during the recent boom years:
"Families who chased the home ownership dream during Calgary's boom years are contributing to growing levels of household debt in the province as price gains have outstripped incomes.
The risky mix of cheap borrowing costs and weak growth in household real incomes has consumers "punch drunk" on debt, the report warns, with the debt-to-income ratios worst in Alberta, British Columbia and Ontario.
The "surge in real estate prices during the boom" that forced homebuyers - many of whom came from out of province - to take on relatively high rates of debt is the leading cause of Albertans' heavy debt load, said Benjamin Tal, deputy chief economist with CIBC.
"As well, a very high level of confidence during the boom led many to assume a larger debt load under the assumption that wages will continue to rise at the same rate."
http://www.calgaryherald.com/touch/b...tml?id=6059830
Once OSFI impliments much stiffer rules on banks, and takes the reigns over CMHC, you'll not likely see much change until then. Banks are trying to spark the markets with historically low rates but how long can that last? Easy credit has been the only real driving force behind the surge in real estate in the last decade.
How MOST markets work? You mean like the U.K? A country that has had three bouts of rapid house-price inflation in the past 40 years, and all of them have been followed by painful busts.
Or Japan? A real estate bubble brought on by lax lending standards with rampant speculation pushing prices 6x higher only to burst - taking the economy and equity markets with it. Homes lost 80% in value and remained there for years.
I won't bring up the U.S market as it speaks for itself. A telling story of what happens when greed and emotion take over - borrowing beyond their means. Are Canadians any better? Obviously not - RRSP contributions are at record low levels while almost 7 in 10 Canadians own a home. No one is saving anymore, maxing out HELOC's to buy cottages, boats or renovating. On and on it goes. Buy hey "it's different here".
Then what about Australia? Both are big countries, small domestic economy, big reliance on natural resources and susceptible to volatile commodity prices. A correction has already started there. Last year, Melbourne prices dropped by almost 6%, Brisbane is off 7.5%. Last October alone, Perth prices sank at an annualized rate of 10%, and Brisbane crumbled 19%.
So MOST markets are balloons? What markets are you referring to?