Extreme risk testing by the Canada Mortgage and Housing Corporation ( CMHC ) warns that if oil rises to $ 35 a barrel and remains there for five years , house prices would plunge 26 % with unemployment dropping 12.5 % . However , when accounting for the global deflation that would be likely in such a scenario , those figures would decline to 44 % and 16 % respectively . Whilst highly unlikely , CHMC uses the scenarios to estimate the capital levels for the mortgage loan insurance business and concludes that it has sufficient capital without the need for a government loan . Currently , strong employment pressures and low interest rates have bolstered housing prices which rose 6 % in the year to October , although the outlook for next year is not so clear cut , with projections ranging from a 5 % fall to a 6.5 % rise .
Extreme scenario testing by the Canada Mortgage and Housing Corporation (CMHC) warns that if oil falls to $35 a barrel and remains there for five years, house prices could plunge 26% with unemployment dropping 12.5%. However, when accounting for the global deflation that would be likely in such a scenario, those figures would decline to 44% and 16% respectively. Whilst highly unlikely, CHMC uses the scenarios to set the capital levels for the mortgage loan insurance business and concludes that it has sufficient capital without the need for a government bailout. Currently, strong employment figures and low interest rates have bolstered housing prices which rose 6% in the year to October, although the outlook for next year is not so clear cut, with projections ranging from a 4% fall to a 6.5% rise.