Posted by: AdminS
Approximately three months ago, the Canada Mortgage and Housing Corporation officially rang the bell on the Canadian housing market. The Crown corporation stated that the Canadian housing market displays “strong evidence of problematic conditions,” particularly in Toronto, Vancouver, Hamilton & Quebec City.
For the second consecutive quarter, CMHC has kept the red flag at mast due to the overvaluation prices of homes in Victoria, Vancouver, Toronto and Hamilton. The worry being that the upward momentum in prices continues to deviate from economic fundamentals and may be fuelled primarily by speculation and the fear of missing out on home-ownership.
According to the CMHC report, “The objective [of the report] is to identify locations in which there is a heightened vulnerability to housing market stability from the level of house prices or from factors that are known to influence future house prices.”
Although the Greater Toronto Area continues to be red-hot, CMHC was careful to point out in the news release that the prices of homes were flat in Canada – once Ontario is removed from the equation. The CMHC report did indicate that the price growth in Toronto and Vancouver spreads to neighbouring cities such as Hamilton and Victoria, where buyers can remain in the general region and perhaps get a lower price.
All is not bad news, however; as the report indicates that in areas impacted by the low price of oil, such as Newfoundland & Labrador, Saskatchewan and Alberta, home prices have cooled to sustainable levels in line with the performance of the Canadian economy.
CMHC’s Housing Market Assessment assesses each market’s risks based upon four distinct categories:
– price acceleration
Within each of those categories, each market is assessed on whether there is a weak, moderate or strong rating. Overall ratings are produced for the markets and a final overall rating is provided for Canada as a whole.
Each group gets a weak, moderate or strong rating and 15 centres are studied with an overall rating and then further overall rating produced for the country.
If you would like to see the Housing Market Assessment report in its entirety or by individual markets – the reports are available on the CMHC website for free.
Have questions about a particular market? Not sure what you should be doing with your home after hearing about over-heated markets?
Fill out the form at the top of the page and speak get trusted advice today.