The latest warning of an over-valued housing market has come from credit ratings agency Fitch.

The analysts say that the market needs slow down soon or the federal government may have to take yet another measure to try to reduce the heat.

Fitch Ratings says that the high prices caused by low interest rates and a lack of supply in metropolitan areas have been the normality since the start of the recession, but that economic changes could trigger a crash. The main concerns are a rise in unemployment and/or interest rate rises.

David Madini from Capital Markets believes the housing sector is in line for a “major correction over the longer term”. The latest stats on prices are expected today from the Canadian Real Estate Association.

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