The Canadian housing market continues to function in a consistently insensitive manner. It's like it fails to realize that the rest of the free world is hurting, and this persistent, and seemingly abnormal, growth is bound to cause more offense than awe. The Canadian Real Estate Association (CREA), only yesterday, released some more upsetting news - the country's home sales have risen once again (by 1.2% in October), and the overall industry outlook too remains sanguine (1.4% higher sales expected overall in 2011 vs. those in 2010). What is Canada doing differently? Are Canadians a particularly hopeful bunch, or is there something more sinister at play? Why is it that owners and buyers alike have not taken to renting with as much fervor as their American and British friends so apparently have?

A little digging into the operations of the Canadian economy in general, and the housing market in particular; and one comes off even more troubled than before. The global demand for the country's produce (i.e. Crude Oil, Natural Gas and Automobiles) have only grown; its lenders adhere to (and honor) a stricter set of regulations, and the government's efforts to stabilize the economy have been lauded rather than ridiculed. The country might be singled out as an exception, but the only exceptional thing it has done is keep the risky borrowers out of the greater market. If you can't afford that C$1 million property in the desirable downtown Toronto district of your choosing, banks don't approve your mortgage. Even during the recklessly fueled housing boom of simpler times (circa 2007) the number of homeowners in Canada with loan-to-value ratios (LTV) of 80% or greater was negligible as opposed to those in America, and the Great Britain. Regardless of these so-called market deterrents, Canadians' demand for housing witnessed sustained growth, and house prices still remain high.

Another striking element of this very peculiar Canadian experience is the electorate's unconventional response to their leaders. The authorities have made adequate downward revisions in interest rates, and the population has oddly responded by showing buyers confidence. Immigration too has an interesting role to play. As per recent reporting, the Chinese contingent has been instrumental in stoking house prices in certain Canadian cities. This coupled with the government's unrelenting funding of public works, and other social service programs (read, welfare) has resulted in adding to the desirability factor of localities, whereby generating even more buyer interest.

Analysts, however, don't consider the Canadian economy to be able to perpetually weather these troubling financial winds from offshore. This confounding growth they believe will peter out; although, a virulent recession does not feature on the forecast. The current price pattern is consistent with Canada's national 10-year average. The house prices are rising, but less aggressively so, thus, those of you hoping that the now ubiquitous crash is imminent might be in for yet another surprise. What is worrisome though is the potential effect of a sudden increase in the now affordable rate of interest. Canadians too have been observed to be spending a little more extravagantly; resembling their ailing neighbors in the amount of debt they're accruing. If this trend is allowed to continue, even a slight increase in rates could spell trouble for homeowners. Then again, the Bank of Canada (BOC) has avowed to do whatever it takes to avert crisis, and do right by its people. The insanity never ends.