I really can't discount the potential for a housing crash. On a long enough time period, prices are bound to pop due to one thing or another. How much, is up for debate.

However, from what I can tell, most of the doomsday warnings are based on a small set of numbers - the median house price, household income, & rental prices.

The projections don't take into account several things, at least in the Toronto market:

• Canadians have historically preferred detached housing, which is in short supply in Toronto, thus the high cost of detached homes.

• There's little room to grow further due to the fact that we're surrounded by the Greenbelt, which means land values are increasing due to the fact that more people are moving into the GTA every year.

• Furthermore, we have a huge concentration of jobs in downtown Toronto, and a pretty bad commute. Surveys have shown that people in Toronto are willing to pay more for smaller spaces if they can reduce their commute, thus increasing the price of houses with good access to transit / downtown.

• Condo prices are stagnant because of two reasons. Firstly, there are a lot of condos being built, and people have lots of choices. Secondly, they're still often considered temporary or second-rate options compared to detached housing, especially when you have a family. But with people still moving to the GTA, we're going to have to get used to increased density, and at some point living in a smaller, urban space will be acceptable just like it is in other large cities around the world.

Disclosure: I lucked out in that I was born at a certain time so that I was able to buy a house before the market went totally nuts - I've homeowner for the past 10 years, and yes, a crash would affect me. But I believe the reason why I decided to buy, and the reasons why I continue to own, are because I believe the projections of a significant crash (in the GTA - I'm not familiar with real estate in other parts of the country) do not take into account many of the local issues (Greenbelt, transit situation, etc) that Toronto faces.