The head of investment for Canada’s largest insurance company doesn’t seem too excited about investing in Canadian housing right now.

Sadiq Adatia, investment chief for Sun Life, told a conference in New York this week he expects Canadian house prices to fall 10 to 15 per cent as mortgage rates climb.

I don’t think the demand is going to be there for housing,” Adatia told the Bloomberg Canadian Fixed-Income Conference, as reported by Bloomberg News.

Adatia’s comments come just as numerous market observers have declared an end to the relatively mild housing slump that began last year, at least in most markets. Home sales and average house prices have both begun to climb after softening through 2012.

But Adatia described this as a “dead cat bounce” — a Wall Street term meaning a brief recovery in the price of a declining asset.

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  • Victoria: down 2.5%

    House price change, August 2012 to August 2013 Source: <a href="http://www.housepriceindex.ca/Default.aspx" target="_blank">Teranet-National Bank Composite Index</a>

  • Halifax: down 0.6%

    House price change, August 2012 to August 2013 Source: <a href="http://www.housepriceindex.ca/Default.aspx" target="_blank">Teranet-National Bank Composite Index</a>

  • Vancouver: down 0.5%

    House price change, August 2012 to August 2013 Source: <a href="http://www.housepriceindex.ca/Default.aspx" target="_blank">Teranet-National Bank Composite Index</a>

  • Ottawa: up 0.3%

    House price change, August 2012 to August 2013 Source: <a href="http://www.housepriceindex.ca/Default.aspx" target="_blank">Teranet-National Bank Composite Index</a>

  • Montreal: up 0.7%

    House price change, August 2012 to August 2013 Source: <a href="http://www.housepriceindex.ca/Default.aspx" target="_blank">Teranet-National Bank Composite Index</a>

  • Winnipeg: up 2.6%

    House price change, August 2012 to August 2013 Source: <a href="http://www.housepriceindex.ca/Default.aspx" target="_blank">Teranet-National Bank Composite Index</a>

  • Edmonton: up 2.6%

    House price change, August 2012 to August 2013 Source: <a href="http://www.housepriceindex.ca/Default.aspx" target="_blank">Teranet-National Bank Composite Index</a>

  • Quebec City: up 3.5%

    House price change, August 2012 to August 2013 Source: <a href="http://www.housepriceindex.ca/Default.aspx" target="_blank">Teranet-National Bank Composite Index</a>

  • Toronto: up 3.8%

    House price change, August 2012 to August 2013 Source: <a href="http://www.housepriceindex.ca/Default.aspx" target="_blank">Teranet-National Bank Composite Index</a>

  • Hamilton: up 5.5%

    House price change, August 2012 to August 2013 Source: <a href="http://www.housepriceindex.ca/Default.aspx" target="_blank">Teranet-National Bank Composite Index</a>

  • Calgary: up 6.5%

    House price change, August 2012 to August 2013 Source: <a href="http://www.housepriceindex.ca/Default.aspx" target="_blank">Teranet-National Bank Composite Index</a>

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  • 14: Vaughan, ON - $17.8 million

    Six bedrooms and 12 bathrooms in this house the realtor describes as a veritable "Versailles" in the Toronto suburbs. Amenities include a seven-car garage, a "Ferrari room" (can you keep any other cars there?), handpainted sculptures and ceilings, and a heated indoor pool.

  • 14: Vaughan, ON - $17.8 million

  • 14: Vaughan, ON - $17.8 million

  • 14: Vaughan, ON - $17.8 million

  • 14: Vaughan, ON - $17.8 million

  • 14: Vaughan, ON - $17.8 million

  • 14: Vaughan, ON - $17.8 million

  • 14: Vaughan, ON - $17.8 million

  • 13: Toronto, ON - $19 million

    This two-story, 10,000-square-foot condo in the heart of Toronto's super-ritzy Yorkville neighbourhood boasts four bedrooms, five baths and 5,000 square feet of terraces. One feature that could make many Toronto commuters jealous is the parking availability — the condo comes with four spots.

  • 13: Toronto, ON - $19 million

  • 13: Toronto, ON - $19 million

  • 13: Toronto, ON - $19 million

  • 13: Toronto, ON - $19 million

  • 13: Toronto, ON - $19 million

  • 13: Toronto, ON - $19 million

  • 12: Vancouver, BC - $19.7 million

    Though it might look like a bungalow from some angles, this is actually a three-story house located on UBC's endowment lands. Eight bedrooms and eight bathrooms on some 11,500 square feet. Not to mention an indoor pool and a view of the ocean.

  • 12: Vancouver, BC - $19.7 million

  • 12: Vancouver, BC - $19.7 million

  • 12: Vancouver, BC - $19.7 million

  • 12: Vancouver, BC - $19.7 million

  • 12: Vancouver, BC - $19.7 million

  • 12: Vancouver, BC - $19.7 million

  • 11: Vancouver, BC - $19.8 million

    This penthouse unit in Vancouver's tallest waterfront tower features a media room, a climate-controlled wine room and views in all directions from multiple terraces. Four bedrooms and five bathrooms on 6,000 square feet of living space.

  • 11: Vancouver, BC - $19.8 million

  • 11: Vancouver, BC - $19.8 million

  • 11: Vancouver, BC - $19.8 million

  • 11: Vancouver, BC - $19.8 million

  • 11: Vancouver, BC - $19.8 million

  • 11: Vancouver, BC - $19.8 million

  • 11: Vancouver, BC - $19.8 million

  • 10: Vancouver, BC - $19.8 million

    For a house of this price, the 3,400 square feet of living space and four bedrooms might seem less than impressive. But then, the house sits on a 75,000-square-foot lot overlooking the ocean. In Vancouver's Point Grey neighbourhood, that's enough to crown you king. For a wealthy investor, this property could be an ideal "tear-down." Sadly, only two pics available of this house.

  • 10: Vancouver, BC - $19.8 million

  • 9: Vancouver, BC - $19.9 million

    The selling agent promises "360 degree panoramic views of Coal Harbour, mountain, Stanley Park & the city" in this 6,000-square-foot, three-bedroom penthouse. Features include a double-height living room, a rooftop jacuzzi and ensuite bathrooms in each bedroom.

  • 9: Vancouver, BC - $19.9 million

  • 9: Vancouver, BC - $19.9 million

  • 9: Vancouver, BC - $19.9 million

  • 9: Vancouver, BC - $19.9 million

  • 9: Vancouver, BC - $19.9 million

  • 9: Vancouver, BC - $19.9 million

That echoes suspicions among some economists and analysts that recent strength in the housing market is due to homebuyers scrambling to lock in mortgages ahead of expected rate hikes.

Rates on fixed-rate mortgages have climbed about three-quarters of a percentage point since the spring, and the sub-three-per-cent rates seen earlier this year are a thing of the past.

If the rising numbers are indeed because of a last-minute rush ahead of rising rates, the upswing in demand for housing could be short-lived, and the real estate market could turn south again quickly.

Rising interest rates — especially with house prices so high — could have a considerable impact on prices. Economist Will Dunning recently estimated that a one-percentage-point increase in interest rates could send home sales in Toronto down 15.3 per cent, with prices falling about six per cent.

House prices hit another all-time high in August, according to Teranet’s index of resale prices in the 11 largest Canadian markets, growing 3.7 per cent so far this year.

Home sales volumes, however, have been on a real tear: Toronto saw sales jump 21 per cent in the past year, while Vancouver reported a stunning 52.5-per-cent jump in sales. Numbers like that have the more pessimistic market observers worried about a housing bubble.

That’s certainly the case with The Economist magazine, which recently reiterated its assertion that Canada has one of the world’s most “bubbly” housing markets. It estimated house prices are overvalued by 30 per cent compared to incomes, and by 74 per cent when compared to rental rates.