Numbers clearly indicate that last year was a very successful one for Canadian real estate market. Sales climbed over 520 000 units, up 7.6 percent from 2006 levels. This was the largest growth since 2002. Transactions via the MLS systems have reached more than 500,000 units sold. The average real estate sale price was up by 14.1% to $317,825 in December 2007 when compared to December 2006 However, year 2008 opened a number of questions. It wasn't only the US real estate market bubble, but also oil and food price problems that made many people believe recession is knocking at the back door again. Canadian economy has slowed down a bit at the end of 2007 and GDP growth for Q1 2008 was negative: -0.1 per cent. Reasons? Export level is to blame, for one. Due to problems in Canada's biggest partner, USA and weak US dollar, exports went down. Rising commodity prices are actually not bad for Canada. Fossil fuel costs are rising, that is why more and more nuclear power plants are being built in the world. And Canada is world's top uranium supplier, covering 25% of the world's needs. Lifetime group The biggest world economy and our nearest and the most important neighbour is USA. Canada wants to know if we can experience the same real estate problems as our neighbour. But who is to blame for the real estate crisis in the States? After the Dot-com bubble and 9/11 events, FED interest rates fell to 1% and real estate started booming. It was very easy to get subprime mortgages. Properties were overpriced and than the bubble bursted - everybody knows the story. Is this what the future holds for Canada, too? Well, not quite. Subprime mortgages are the biggest difference. They can generally be defined as mortgages offered when home purchasers do not fit the banks' prime mortgage customer profile. While they cover about 20% in USA, Canadians seem much more conservative in this question - similar mortgages create about 5% of the market. Canadian loan policies are more strict than in the USA. The most dangerous are "teaser" mortgages that offer low initial rates, then later reset at a higher level, or other mortgages made to individuals with minimal income and no coverage contributed to the crisis substantially. These products are not common in Canada, however, new ones emerged on the Canadian market recently and subprime segment is expected to double in next five years. Lower numbers of sales and rising new listings seen recently are obvious. The question is, whether it's just simple trend correction, or bubble losing air faster and faster. Predictions by experts remain optimistic. Resales are expected to drop, but still supposed to remain above 465,000 in every of next two years. Decline in new starts is expected as well, but with numbers still above past years average. Interest rates are not supposed to change substantially. A cut from 3.0% was expected in June and may be still possible in the near future. On the other hand, other commodity price turmoil may raise inflation and consequently interest rates in the future, making mortgages more expensive. Net migration is believed to remain on high level of about 200,000 people. People who will search for homes on the market! On the other hand, Canada's birth rate is decreasing, potentially lowering future demand for housing. Baby boomers: First baby boomers from the 1947-1966 period will retire. The question is whether they will look up for recreational property in Canada, or sell their house and move to Costa Rica? Energy prices: probably will influence the structure of demand in the future. Energy consuming huge houses in distant suburbs will be pushed by inner city modern condos. Everybody should make his or her own conclusion based on the above facts. Canadian real estate is slowing down now and market is turning from strictly seller driven to balanced one, with more affordable housing. However, buying real estate will be still a good investment, with price growth beating the inflation rate.