But in releasing its latest report card for Canada, the IMF predicted a soft landing for the housing market and described the economy's performance as relatively stable in the global context, thanks to an improving export sector and stronger U.S. growth.
An IMF official said Wednesday that Canada's housing market is over-evaluated by roughly 10 per cent on a national scale, though in some regions those estimates could reach as high as 20 per cent.
"So, for us it remains a concern," Hamid Faruqee told a news conference in Ottawa.
He cautioned Canada could be at risk of a sharp correction if interest rates rose too quickly and the labour market suffered a downturn.
The IMF report said government measures introduced since 2008 have been "broadly effective" in dealing with stability risks in the housing market, helping to limit the growth of insured mortgage credit and beef up credit standards as prices increased.
It also projected "above-potential" GDP growth for 2015 of between 2.25 to 2.5 per cent, though Faruqee noted the slide in oil prices in recent weeks was not factored into the calculation.
"With oil prices about 20 per cent lower now than where we were in October, we will probably shave a little bit off that number," Faruqee said, before adding that provinces with large manufacturing sectors would likely benefit from cheaper oil.
"On balance, we would see lower oil prices having a slight negative impact on growth."
The organization also said the shift in growth to Canadian businesses from household spending has been slow because companies remain hesitant to invest in their operations.
Bank of Canada governor Stephen Poloz made a similar comment last month when he released his monetary policy report.
The federal government, IMF added, remains on track to balance the budget next year. The organization even offered some advice on tax cuts and expenditures that it believes would benefit the Canadian economy.
"In terms of using those available fiscal resources, we could see a case for, for example, lowering personal income taxes at the federal level," Faruqee said, adding Ottawa should consider research and development spending and other investments.
"There are some areas where the government could also kind of support productivity growth in the economy, which has been lagging in Canada."