Credit rating firm Moody’s says that Canada’s economy is in good shape; with a stable banking system and a near-balanced budget; but there is concern over the housing market.

The annual report supports Canada’s AAA rating but warns that the housing market presents a potential risk to the banks; and to the government finances due to the CMHC.

Steven Hess who authored Moody’s report says the housing market is “particularly inflated” and represents the “largest downside risk” in the report. He also believes that with some slowdown in construction already being seen there are “no signs of a soft-landing”.

Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate

More market watch: