House Prices Overvalued In 11 Of Canada’s 15 Biggest Cities, CMHC Says!
Home price overvaluation is a concern in two-thirds of the biggest housing markets across Canada, the CMHC said Thursday.
VANCOUVER – Canada’s national housing agency is warning of “problematic housing market conditions” in most of the country’s major housing markets, including Vancouver which tops the list.
The Canada Mortgage and Housing Corporation said in its Housing Market Assessment report on Thursday that many housing markets are showing troubling signs in four criteria:
When all four factors are taken together, the agency singled out four cities for being particularly troubling: Saskatoon, Regina, Winnipeg and Toronto, reported CBC News.
“In Toronto, strong evidence of problematic conditions reflects a combination of price acceleration and overvaluation,” the CMHC said. “Strong evidence of problematic conditions in Winnipeg, Saskatoon, and Regina reflects detection of overvaluation and overbuilding.”
While those four cities gave the housing agency the most concern overall, overvaluation was called widespread.
It was cited as either a “moderate” or a “strong” problem in 11 of the 15 cities the CMHC includes in its assessment.
The cities include:
Vancouver.
Victoria.
Calgary.
Edmonton.
Regina.
Saskatoon.
Winnipeg.
Toronto.
Hamilton.
Ottawa.
Montreal.
Quebec.
Moncton.
St. John’s.
Halifax.
“The most prevalent issue detected in 11 of the 15 centres covered by the HMA is overvaluation,” CMHC’s chief economist Bob Dugan said. “The evidence of overvaluation has increased since the previous assessment in Toronto, Vancouver, Montreal, Edmonton and Saskatoon as price levels are not fully supported by economic and demographic factors.”
The four cities where the CMHC said overvaluation isn’t a problem are Victoria, Hamilton, Moncton and St. John’s.
Earlier this month, the Canadian Real Estate Association reported that the average Canadian home sold in September went for $433,649, a figure that has risen by six per cent in the previous 12 months.
But the Realtor group said most of the gains in the national figure are coming from Toronto and Vancouver. Outside of those two cities, house prices have appreciated by less than three per cent in the past year, the association said.
The CMHC’s report Thursday suggests the problem may be more widespread than possible local bubbles in those two cities.
