Some excellent points and advice already on here. I will hopefully add a few more:
1. As other posters have said, real estate is local. Look at the economic situation surrounding you. If incomes are supporting prices, then I wouldn't worry too much, especially if you plan to live in this condo for an extended period of time.
2. Unlike stocks, Real Estate tends to be very sticky. Just because prices have not dropped significantly in Alberta does not mean they wont over time Especially once EI runs out ...
3. Groupthink is a factor here. Canadians have been raised for several decades to believe houses 'only go up' and are the 'safest investment'. With cutbacks in the mainstream media, real estate 'stories' (AKA ads) permeate our collective conscience. We truly believe as a nation that 'this time is different'. This is also why all markets are likely to be affected to an extent if a major downturn does take place.
4. For many Canadians their home IS their retirement plan. The government is very aware of this and no elected party is going to do anything to purposely derail this. In fact, they have done, and will continue to do everything they can to keep things propped up. At least until the boomers are through ...
5. Emergency interest rates combined with a massive increase in personal debt are playing a huge role here. Prices based on debt can only inflate so high. Eventually we will have a pullback as a result of this.
6. Most of the limited studies into foreign investors show that they are only responsible for a very minor portion of our two biggest real estate markets. We are not being bought up or 'saved' by outside investors to the extent that the media would have us believe. Your neighbor with a household income of $80,000 and a $600,000 mortgage should worry you more
7. Markets can stay irrational longer than we can remain solvent. This is why making major plays based on when a market downturn will happen is not a wise strategy. Look at your income, savings, equity, and local job market and make a plan based on your house being a home, not an investment, and you will do fine.
8. I am obviously biased.