The buildup of these vulnerabilities continued after the global financial crisis in 2008 and 2009. Canada's financial system sailed through that shock relatively smoothly, and our economy recovered more quickly than most. A decade of low interest rates, a growing population and constrained housing supply all combined to feed a steady march upward in house prices.
Higher house prices meant Canadians were taking on more debt to buy homes. And as prices continued to rise quickly, some Canadians saw housing as an investment opportunity as well as a source of shelter and took on additional debt to invest in housing.