The Canadian housing market is at high risk of unravelling, according to one expert. 
The level of debt that Canadians have taken on in comparison to their incomes has put many in a precarious position should mortgage rates continue to rise — which is likely, Phillip Colmar, partner at Global Strategist at MRB Partners, told BNN Bloomberg in an interview on Tuesday. 
“Canada is probably sitting on the largest housing bubble of all time,” he warned. 
Colmar argued that the inflated home prices in Canada are a result of two decades' worth of easy money supplied by the Bank of Canada’s monetary policy for numerous reasons. At the present moment, he sees risk in mortgage rates climbing as Canadian bond yields are dragged up, particularly at a time when debt-to-income ratios are sky high. 
“The worst part for a housing bubble is when you have [a] credit bubble underneath it,” Colmar warned. 
“The amount of Canadian leverage into the system versus incomes is pretty astronomical — and we’ve seen debt servicing going up dramatically.”
While the Canadian banks are doing their part to stop the housing market from toppling over, Colmar said he believes it inevitably will. 
“There is definitely a risk here that if mortgage rates go higher or unemployment were to rise or we hit the next recession, then this thing does end up in a deleveraging cycle,” he said.