CMHC says overall housing market no longer highly vulnerable after prices ease

Housing prices in Vancouver, Victoria, Toronto and Hamilton move closer to sustainable levels

The Canada Mortgage and Housing Corp. says it no longer rates the country’s housing market as highly vulnerable after an overall easing of price acceleration.

The federal agency said in a report Thursday that it rates the overall market at moderate after 10 consecutive quarters at the highly vulnerable rating, though some cities remain at elevated risk.

“The state of the national housing market has improved to moderate vulnerability,” CMHC chief economist Bob Dugann said in a statement.

“Even though moderate evidence of overvaluation continues for Canada as a whole, there has been improved alignment overall between house prices and housing market fundamentals in 2018.”

The inflation-adjusted average price decreased 5.4 per cent in the last quarter of 2018 from the same period a year earlier.

READ MORE: CMHC sets target to make housing affordable for every Canadian by 2030

CMHC said that while house prices in Vancouver, Victoria, Toronto and Hamilton moved closer to sustainable levels, it continues to see a high degree of vulnerability in those markets.

The agency noted that while Vancouver remains rated at highly vulnerable, evidence of overaluation has changed from high to moderate.

The biggest cities in the Prairies remain at a moderate degree of vulnerability, while Ottawa, Montreal, Quebec City, Moncton, Halifax and St. John’s are rated as low vulnerability.

The report based its vulnerability assessment on several criteria including price acceleration, overvaluation, overbuilding, and overheating.

Price acceleration has eased nationally after the federal government’s mortgage stress tests came into effect in 2018 and raised the bar for qualifying for a mortgage, the report said.

“Tighter mortgage rules, likely reduced demand for housing, and contributed to the observed decline of house prices.”

CMHC also noted that inflation adjusted personal disposable income dropped by 1.2 per cent to reduce buying power, but that was partially offset by a young-adult population that grew by 1.9 per cent to continue to increase the pool of potential first-time homebuyers.

The Canadian Press

Like us on Facebook and follow us on Twitter.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

B.C. police watchdog group investigating after June 1 death of Kitimat man

The man was reported to have fallen a number of times while in police custody on May 30

Skeena MLA advocates for small LNG project in Terrace

Many questions unanswered about project, say opponents

CGL completes first in-field pipeline welds for Kitimat section of project

‘I never thought I’d live to see this day:’ Skeena MLA praises start of pipeline welding in Kitimat

B.C. government eyes antlerless moose harvest increase in bid to save caribou

Antlerless moose hunts reduce predation for threatened mountain caribou, says ministry

Housing committee recommends District deny strata application for 1425 Nalabila Boulevard

Council is set to consider the matter at their June 1 meeting

If Trudeau won’t stand up to Trump, how will regular people: Singh

Trudeau did not directly answer a question about Trump’s actions amid protests

VIDEO: Internal investigation into aggressive arrest by Kelowna Mountie

A video allegedly shows a Kelowna Mountie striking a man several times

22 new COVID-19 test-positives, one death following days of low case counts in B.C.

Health officials urged British Columbians to ‘stand together while staying apart’

John Horgan says COVID-19 restrictions won’t be eased regionally

B.C. Liberals urge ‘tailored’ response based on infections

Feds get failing grade for lack of action plan on anniversary of MMIWG report

‘Instead of a National Action Plan, we have been left with a Lack-of-Action Plan’

Introducing the West Coast Traveller: A voyage of the mind

Top armchair travel content for Alaska, Yukon, BC, Alberta, Washington, Oregon and California!

B.C. ranchers, lodge operators say Indigenous land title shuts them out

Tsilhqot’in jurisdiction affects grazing, access to private property

As two B.C. offices see outbreaks, Dr. Henry warns tests don’t replace other measures

Physical distancing, PPE and sanitizing remain key to reduce COVID-19 spread

Greater Victoria drive-thru window smashed after man receives burger without mustard

Greater Victoria Wendy’s staff call police after man allegedly rips Plexiglas barrier off window

Most Read