OTTAWA, July 27, 2016 – Evidence of problematic conditions in Canada’s housing market as a whole has increased from weak to moderate since the last report, according to the latest Housing Market Assessment (HMA) released today by the Canada Mortgage and Housing Corporation (CMHC). ). In Vancouver, we now have sufficient evidence to raise our overall assessment of problematic conditions in the Vancouver housing market to high.
The HMA serves as an early warning system, alerting Canadians to areas of concern developing in our housing markets so that they may take action in a way that promotes market stability.
Report Highlights
- Overvaluation and overbuilding remain the most prevalent problematic conditions observed across the 15 centres covered by the HMA.
- Overvaluation is detected in 9 centres while overbuilding is detected in 7.
- Overall evidence of problematic conditions has increased since the previous assessment nationally as well as in Vancouver.
- Strong evidence of problematic conditions is seen in Vancouver, Toronto, Calgary, Saskatoon and Regina. In Toronto and Vancouver, this is due to the combination of price acceleration and overvaluation. In Calgary, Saskatoon and Regina, this is due to the combination of overvaluation and overbuilding.
- Moderate evidence of problematic conditions is seen nationally as well as in Edmonton, Winnipeg, Hamilton, Montreal, and Quebec.
- Evidence of overvaluation has increased since the previous assessment nationally and in Hamilton.
- Overall evidence of problematic conditions has decreased in Ottawa since the previous assessment.
CMHC defines evidence of problematic conditions as imbalances in the housing market. Imbalances occur when overbuilding, overvaluation, overheating and price acceleration, or combinations thereof depart significantly from historical averages. For examples, please consult the Overview section of the national report.
The complete HMA, including national, regional and CMA insight and analysis, is available on ourwebsite.
“For Canada overall, we now detect strong evidence of overvaluation. As a result, our overall assessment has moved from weak to moderate since the last report. Moreover, the greater range of evidence of problematic conditions in Vancouver has led us to conclude that there is now strong evidence of problematic conditions in our overall assessment of the Vancouver housing market.”
— Bob Dugan, Chief Economist, Canada Mortgage and Housing Corporation
“Right now we're seeing moderate evidence of overheating and price acceleration in Vancouver because supply is not keeping pace with demand. We're also continuing to see strong evidence of overvaluation mainly because single detached home prices are higher than those supported by economic fundamentals.”
— Robyn Adamache, Principal Market Analyst (Vancouver), Canada Mortgage and Housing Corporation
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