Think of it as “disaster preparedness” for the housing market.

Canada Mortgage and Housing Corporation ran a series of stress tests – to see how vulnerable the Canadian market could be.

One result showed house prices could drop as much as 30 percent – in the case of a sudden rise in interest rates.

Other scenarios included an American-style housing correction.

The agency also considered the possibility of a high-magnitude earthquake.

After assessing the various negative scenarios C-M-H-C says – the test results confirm that its capital holdings are sufficient to weather the storm.