Even where I am in Halifax which is considered to be one of the most affordable markets in the country, there are very very few places that would hit the 1% rule. But, like bitcoin, as long as the price keeps going up, the more people take note, and the more people pile in, which drives prices further, then it doesn't matter if you lose money each month, since the appreciation will more than make up for it. I'm currently renting here for around 0.4%, and the LL is constantly griping about how little money he makes. The market wont really support much higher rents, but does prices for some reason. It doesn't help that the last several gov'ts of all stripes have done everything in their power to keep this gas bag going. From 0 down 40 yr mortgages, to expanding CHMC limits, to the current and expanding co ownership schemes.
Looked at rationally, every conceivable metric like home ownership rates, price to income, price to rents, price appreciation vs wage appreciation are at the highest levels ever, and beyond where the US was when it fell off the rails. In Vancouver it takes over 100% of average after tax income, to service an average mortgage. Saving rates are near zero, half of people are $200 away from insolvency each month. It seems that Canadian housing runs the gamut from "overpriced" in the more affordable markets, to the literal "limit of financial capability" in Vancouver. If you're eating ramen, have no car, already taken on a boarder, make an above average income and have a below average home which consumes all your money, who is going to buy it from you in 5 years at double the price?
That said, lots of people delude themselves into thinking they're cash flow positive. I subscribe to the mindset of Paula Pant who says that to evaluate an investment home, look at it as if bought with cash, and everything from management, to maintenance, to cleaning is outsourced, and have realistic numbers for things like vacancy.
Many amateur landlords will put 50% down, lease it themselves, do all the handwork themselves, account for zero vacancy, amortize zero for long term big issues like a new roof, and then rave about how easy it is to be cash flow positive. I guess that's true and repeatable - so long as you have a bank willing to lend you 50% down at zero interest, and a pool of labour willing to manage and repair your place for free.
