Is the housing bubble about to burst? Is Saskatchewan the first to go??

The Bank of Montreal says the housing market nationwide could be in for a serious fall. A study released Friday suggests that could happen if prices do not moderate. And, the study points to Saskatchewan as the province in the most danger of crashing.

Douglas Oorter, the Deputy Chief Economist for BMO capital markets, says that house prices have reached a record high. "They've reached a level where they are overvalued on a long term basis."

The difference between house prices and average income is greater here in Saskatchewan than anywhere else in Canada. And if it keeps up the market may not be sustainable.

Nation-wide houses are selling at prices 14 per cent higher than the average income. In Saskatchewan, the price-to-income ratio is 39 per cent. When the market crashed in 1989 the figure was 21 per cent.

BMO says it's happened because of low interest rates, which have allowed Canadians to take out larger house loans.

Reacting to the report, Premier Brad Wall says he's aware of the challenges facing potential homebuyers, and people "need to collectively be cautious and careful"

The silver lining to what appears to be a gloomy forecast -- the bank also predicts there shouldn't be a national housing crash because Canadians are expected to make more money while prices drop off.