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

Police watchdog finds cops blameless for deaths in 2019 Surrey hostage-taking

Woman was killed as ERT officers fired on man holding a knife to her throat and ‘what appeared to be’ a gun in his hand

UPDATE: Catalytic converters stolen from four ambulances being repaired in Delta

The thefts were reported on March 31, and police say they have no suspects at this time

Some Surrey landlords ‘kicking out’ businesses that can’t make rent

Surrey Board of Trade CEO suspects situation will be worse in May

Surrey RCMP not seeing ‘significant loss’ in ranks because of COVID-19

Surrey Mounties say they have a good tracking system to keep tabs on police officers experiencing an illness

First Nations, remote communities need special attention in pandemic, Freeland says

Health-care workers, seniors, Indigenous Peoples some of people most at risk, health officials say

BC Hydro offers three-month bill ‘holiday’ for those affected by COVID-19

Industrial customers can defer half of their power bills

VIDEO: Dog missing in Lower Mainland since winter sees his family again for the first time

Aldergrove helped find Buster, says dad, who has now witnessed ‘the power of social media’

COVID-19: Social media use goes up as country stays indoors

Overall messaging is up more than 50 per cent over the last month

Some April Fool’s Day jokes bring much-needed laughter; others tone deaf to COVID-19

Police are warning the public not to use the ongoing pandemic as a punchline

Canada’s 75% wage subsidy is coming, but not for several weeks: finance minister

Subsidy will cost Canada $71 billion, but push down cost of emergency benefit, Morneau said

Call before you dig into spring projects during isolation: BC 1 Call

BC 1 Call gives free checks for utilities in the area of a desired outdoor project

B.C.’s intersection speed cameras putting more tickets in the mail

One Nanaimo location delayed after speed limit reduced

Update: Coquihalla re-opens, after incident requiring a medevac

DriveBC warns of continued delays and congestion

Most Read