More than two-thirds of housing markets in Canada’s major cities are overvalued, says a leading industry body. There is strong evidence of problematic conditions involving a combination of price acceleration, overvaluation and overbuilding, says the Canada Mortgage and Housing Corporation (CMHC). Chief Economist Bob Dugan says, “The most prevalent issue detected in 11 of the 15 centres covered by the HMA is overvaluation. The evidence of overvaluation has increased since the previous assessment in Toronto, Vancouver, Montréal, Edmonton, and Saskatoon as price levels are not fully supported by economic and demographic factors. “Problematic overvaluation conditions in local housing markets could be resolved by moderation in house prices and/or improving economic conditions.” CMHC’s Housing Market Assessment (HMA) report formerly known as the House Price Analysis and Assessment evaluates the extent to which there is evidence of problematic housing market conditions in 15 Census Metropolitan Areas (CMAs). The HMA points to strong overall evidence of problematic conditions in Toronto, Winnipeg, Saskatoon and Regina. In Toronto, the problem is price acceleration and overvaluation. Winnipeg, Saskatoon, and Regina have issues with overvaluation and overbuilding. There is moderate evidence of problematic market conditions in Montréal and Ottawa due to overvaluation and rising concerns of overbuilding, particularly of condominium apartments. There also continues to be moderate evidence of problematic conditions in the Québec CMA due to overvaluation. In Toronto, Montréal and Ottawa, CMCH is monitoring the potential emergence of condo overbuilding. The HMA points to weak evidence of overall problematic conditions in Vancouver, though it is now detecting moderate evidence of overvaluation. Even so, overheating, acceleration in house prices and overbuilding are not a concern in this market, it says. The report covers national market conditions plus Vancouver, Victoria, Calgary, Edmonton, Regina, Saskatoon, Winnipeg, Toronto, Hamilton, Ottawa, Montréal, Québec, Moncton, St. John’s and Halifax CMAs. It assesses housing market conditions by taking into consideration the economic, financial and demographic drivers of housing markets. The next Housing Market Assessment report is set to be released in the first quarter of 2016. The main picture, by Eva Schuster, is from FreeImages.com.
The Canada Mortgage and Housing Corporation 's ( CMHC ) Housing Housing Assessment ( HMA ) has shown that more than two - thirds of housing markets in Canada 's major cities are now vacant . The HMA provides strong evidence of problematic conditions in Toronto , Winnipeg , Saskatoon , and Regina . Chief Economist , Bob Dugan argues , “ problematic overvaluation conditions in local housing markets could be resolved by moderation in house prices and/or improving economic conditions . ”