“Developments on the housing front require increased vigilance and consideration may need to be given to additional prudential measures to prevent a further building in household debt,” said the report.

Finance Minister Jim Flaherty already took some initial measures recently to slow mortgage borrowing, including reduction of the maximum amortization period to 30 years from 35 years.

Julie Dickson, superintendent of Financial Institutions (OSFI), recently also said her office is “stepping in to increase the monitoring” of home loans and lines of credit secured by real estate.

TD Economics recently noted in an economic report that the household debt-to-income ratio had reached 147% in the second quarter of 2011. The report explained a ratio of 138% to 142% is considered “appropriate.”

But the trouble might only be starting. TD Economics warned the debt-to-income ratio would rise to 150% by the end of 2012, then 151% by 2013. House prices have also now risen to concerning levels in some provinces, according to the report.

“On the domestic front, consumption might moderate more than expected from a large retrenchment in highly indebted households amid concerns of a drop in house price,” said the IMF. “The latter are estimated to be above levels dictated by economic fundamentals in some key provinces.”

The economy has remained stronger in Canada than elsewhere around the world, and improved global financial conditions could bolster confidence and thus spur more domestic demand, according to the report.

The IMF predicted a small rate cut is on the way, as well as no monetary stimulus through most of 2013.