A cross-Canada glimpse into the state of various housing markets. Overall, CMHC rates Canada’s housing market as showing “strong evidence of problematic conditions” due, in large part, to strong evidence of overvaluation at the national level. However, all local markets are unique; so we’ve broken down the ratings highlights by province.
British Columbia Both Vancouver and Victoria are showing strong evidence of problematic conditions, according to the CMHC. “CMHC’s latest Housing Market Assessment continues to show strong evidence of problematic housing market conditions in Victoria,” Eric Bond, Senior Market Analyst (Victoria), Canada Mortgage and Housing Corporation, said. “The last quarter of 2016 was dominated by strong sales and low supply which pushed house prices beyond levels that are supported by fundamentals such as income and population growth. For these reasons, we detected increased evidence of overvaluation in the Victoria market.” Vancouver, meanwhile, is showing moderate evidence of price acceleration and strong evidence of overvaluation.
Alberta Calgary and Edmonton are showing moderate evidence of problematic conditions, with overbuilding an issue both cities.
Saskatchewan Saskatoon is showing strong evidence of problematic conditions due to overvaluation, according to CMHC; however, overvaluation is being addressed by the market with declining prices and strong demographic growth. That evaluation may be updated next quarter. Regina, meanwhile, is showing only moderate evidence of problematic conditions as growth in employment and an uptick in the young adult population increasingly fuel housing demand.
Manitoba Winnipeg is showing moderate evidence of problematic conditions. “Elevated levels of units under construction in 2017 are a risk for additional inventory, however population growth will continue to support housing demand,” CMHC said in its report.
Ontario Toronto continues to suffer from overvaluation, according to the report. “Rapid growth in house prices above rates warranted by economic and demographic fundamentals such as income and population growth has meant the continued detection of problematic conditions in the Toronto CMA housing market,” Dana Senagama, Principal Market Analyst (Toronto) at CMHC said.
Quebec Montreal is showing weak evidence of problematic conditions, according to CMHC. “Our framework has now detected weak evidence of overvaluation, a shift from the previous assessment of moderate evidence,” CMHC said. “Stronger population growth among young adults, combined with the increase in personal disposable income, indicates that house prices have been at levels more in line with those supported by the fundamentals.”
Eastern Canada Moncton, Halifax, and St. John’s all appear to have healthy housing markets. Overbuilding has been addressed in Moncton; unsold homes are declining in Halifax; and declining inventory means less fear of overbuilding in St. John’s.
For full report go to: https://www.cmhc-schl.gc.ca/odpub/esub/68456/68456_2017_Q02.pdf?fr=1493228752415