The International Monetary Fund is again warning about Canada’s housing market.

It acknowledges that we are likely to see a soft-landing; that’s consistent with the Bank of Canada and federal government’s forecast; however it believes that a sharper crash could still occur without further tightening of lending rules.

The IMF estimates that the market is overvalued by between five and 20 per cent. The higher end of the market is particularly vulnerable to correction, the IMF says.

It cautious view of the market includes factors such as a weaker global economy and the low oil price.

The IMF is also repeating its view that banks should be taking more risk on residential mortgages with the CMHC reducing its exposure.

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