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Canada’s housing market is “ripe for a pretty severe correction” with Canadian Imperial Bank of Commerce the most vulnerable, according to Steve Eisman, a fund manager at Neuberger Berman Group LLC.

While Canada’s subprime mortgage market is much smaller than in the U.S., real estate prices in the country have risen more, said Eisman, who was featured in Michael Lewis’s book “The Big Short.” Regulations that Canadian authorities are putting in place will have a negative effect on mortgage volume next year which will translate into lower prices.

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“In Canada, there’s some pretty good evidence that the housing market is finally starting to turn over,” Eisman said in a Bloomberg TV interview on Monday. “Canada is not going to crash, but it hasn’t had a credit cycle in 25 years. I think they’re about to have one.”

Among the country’s banks, CIBC is the most exposed, Eisman said. He said he wouldn’t call the bank at risk of “death and destruction,” but of an earnings decline.

Canadian real estate markets have recovered slightly after sliding on government moves to curb prices but Toronto home sales are still down 36 per cent from a year ago, according to last week’s data from the Canadian Real Estate Association.

Vancouver’s million-dollar home prices aren’t just straining buyers, they’re holding back investment and businesses, British Columbia’s Finance Minister Carole James said last week, vowing to look at every option on the table to cool the market.

Bloomberg.com