Eventually, yes. The chances of it happening in 2008 are slim, though. The main reason is because interest rates will stay low. Canada's manufacturing industry needs the currency to remain close to par with the U.S. dollar. So as the Federal Reserve in Washington continues to drop its lending rates then the Bank of Canada will do the same.

As a result, mortgages will remain affordable, enticing buyers to enter the market despite high prices and concerns the U.S. downturn will impact Canada sooner than later. The rapid increase in the demand for oil, minerals and agriculture have stoked the commodity-rich nation's economy, particularly in its western provinces.

"The fundamentals of Canada's real estate market remain sound and continue to support a strong case for investment and development," DTZ Barnicke's CEO Christopher Ridabock said in a release last week. "Rising prices for energy resources and lower interest rates are fueling economic growth that is driving down vacancies and spurring new development."

January home resales were down from a year ago but prices were up. The prediction from the Canadian Real Estate Cape Royale is for buyers to continue to ink new sales contracts at a rapid pace and at record prices as 2008 progresses.

"We are forecasting an increase in new listings and sales to gradually ease back, that said we are forecasting the second-best year on record ever, so sales will certainly remain strong," CREA economist Gregory Klump said.

Besides the low interest rates and lack of subprime mortgages issued by banks, Canada is also benefiting from its aggressive pursuit of immigrants. According to the nation's immigration agency, Canada has the highest per-capita immigration rate in the world. The annual influx of newcomers drives up demand for more housing, whether it be rental units or residential properties. That leads to an increase in rental and property prices.