Â鶹ӰÊÓ

An analyst who describes Canada as sitting on one of "" warns that if it bursts, the country could be thrown into a deeper recession than forecasted.

"I wouldn't necessarily say it's imminent," Phillip Colmar, partner at Global Strategist at MRB Partners, told Â鶹ӰÊÓ Channel. "I would say it's pretty inevitable."

• 5 Things to Know newsletter: Sign up to start your day with the biggest stories

But what's put Canada's housing market at such high risk of unravelling? Colmar explained the brewing crisis "underneath the surface" and offered his key takeaways to Todd van der Heyden in a one-on-one interview on Tuesday.

HOUSE PRICES TO RELATIVE INCOME

Colmar argues that those looking for a "big headline about a housing bubble" should be keeping an eye on the disparity between house prices and incomes.

He warns that decades of low interest rates in Canada "seduced a lot of home buyers" and has led to "excessive leverage backing up the whole system."

• The Offer newsletter: Sign up for curated coverage of Canadian real estate

But how leveraged are Canadian homeowners? Colmar says it's significantly "north of where the U.S. was" before the 2008 housing market crash.

"Canada kind of is really off the charts on that front."

'A TASTE OF WHAT'S TO COME'

Unlike the U.S., where buyers can qualify for a 30-year mortgage, Canadian borrowers must renew their mortgages every five years -- at the prevailing interest rates.

Colmar argues that's one of the reasons mortgage burdens can become astronomical.

• Top business headlines, all in one place

"Affordability is bad right now," Colmar says, "but debt servicing of those mortgages is pretty excessive."

Interest rates in Canada are currently at the highest levels since 2001, after a year of hikes aimed at combating inflation, and Colmar warns the pressures faced by homeowners with mortgages is "just a taste of what's to come."

WILL THE BUBBLE BURST?

Although Colmar doesn't think that a housing crash is imminent, he does warn that when "you're dealing with these kind of excesses… hopefully interest rates don't rise."

Colmar says some of the key factors to watch for are further interest rate hikes and employment levels – warning that if rising unemployment levels combine with spiking mortgage rates Canada could face a situation similar to the 2008 crisis in the U.S.

What would that look like here?

"A very deep deleveraging cycle, a quite pronounced recession," Colmar says. "The currency will take it on the chin too."

Click the video at the top of this article for the full interview and more coverage.