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.

Just Posted

Russell Books marks opening of new location by setting Guinness World Record

Store stacks world record books more than six metres high

Outrigger canoe teams race over two days to raise money for men’s health initiatives

WetDashe for men’s health highlights benefits of year-round sport on the West Coast

Heritage Haunted House rakes in more than $10,000 to help fill children’s dreams

Spooky fundrasier has been scaring community for 13 years

Northbound lanes re-open along Malahat after small rockslide near Goldstream

Drivers asked to use caution, clean-up crews have finished on-site

Oak Bay girls net senior volleyball Island championship

Claremont Secondary clams second place as both teams head to Provincials

Teen with cancer whose viral video urged Canadians to vote has died, uncle tweets

Maddison Yetman had been looking forward to voting in her first federal election since junior high school

Greater Victoria 2019 holiday craft fair roundup

Get a jump on your holiday shopping

POLL: Do you support CUPE workers in their dispute with School District 63?

SD63 schools to remain closed as strike continues Tuesday

Stelly’s Stingers book ticket to provincial championships

Senior girls volleyball team places second at Island Championships

Cleanup in the works after tanker truck fire leads to oil spill in B.C.’s Peace region

The province said the majority of the spilled oil likely burned away in the fire.

Fisherman missing near Lake Cowichan’s Shaw Creek

Family is asking for everyone and anyone to keep their eyes open,… Continue reading

BC VIEWS: Action needed on healthcare workplace violence

While we’ve been talking about it, the number of B.C. victims has only grown

Closing arguments begin in B.C. case launched in 2009 over private health care

Dr. Day said he illegally opened the Cambie Surgery Centre in 1996 in order to create more operating-room time

MacLean says “Coach’s Corner is no more” following Cherry’s dismissal from Hockey Night

Cherry had singled out new immigrants in for not honouring Canada’s veterans and fallen soldiers

Most Read