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

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

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

(James Smith photo)
North Delta crime beat, week of Nov. 23

A selection of property crimes submitted weekly by the Delta Police Department

Shawn Canil, a Cloverdale-area resident, turns heads with the truck he’s decorated for Christmas. (Photo: Tom Zillich)
Truck’s Christmas decorations lift spirits on Cloverdale man’s commute

‘When I see them smiling, I know it’s worth it,’ pickup driver Shawn Canil says

Ben “Santa” Cohen visits Ecole Martha Currie in Cloverdale Dec. 4. Santa wished everyone a socially-distanced Merry Christmas out in front of the school. (Photo: Malin Jordan)
Santa visits Ecole Martha Currie in Cloverdale

First gig of the season for Ben ‘Santa’ Cohen; COVID driving most gigs online

(Delta Police Department photo)
South Delta crime beat, week of Nov. 23

A selection of property crimes submitted weekly by the Delta Police Department

At least one person received life-threatening injuries when a car collided with a semi truck in South Surrey on Friday morning. (Brenda Anderson photo)
VIDEO: South Surrey crash sends one to hospital in critical condition

Road closures in effect after collison between car and semi-truck

Fresgo Inn chef/owner Walter Wolff in the kitchen of the self-serve restaurant in Whalley. “I’ve got no plan for the retirement,” he says. “My customers always ask me, but as long as I feel good, healthy, I like to come here.” (Photo: Tom Zillich)
VIDEO: Hungry like the Wolff at Surrey diner Walter’s had cooking for 40 years

But lately, COVID-19 has soured business at Fresgo Inn and other B.C. restaurants

British Columbia Health Minister Adrian Dix wears a face mask to curb the spread of COVID-19, during an announcement about a new regional cancer centre, in Surrey, B.C., on Thursday, August 6, 2020. THE CANADIAN PRESS/Darryl Dyck
PHSA bought faulty ventilators; spent money on catering, renovations: Dix

Such spending included ‘unnecessary, unbudgeted renovations’ to the authority’s headquarters in Vancouver

B.C. NDP leader John Horgan releases his election platform, Vancouver, Oct. 6, 2020, featuring COVID-19 relief payments promised for most households. (B.C. NDP photo)
Next $1.5 billion in B.C. COVID-19 cash ‘prudent,’ Horgan says

New round of paymens for household incomes up to $175,000

KIJHL games have been postponed through Dec. 31. (File photo)
KIJHL postpones all games through end of 2020

Due to provincial health orders, games up to Dec. 31 have been pushed back

Robert Riley Saunders. (File)
Former Kelowna social worker arrested for allegedly stealing from foster kids

Robert Riley Saunders was arrested in Alberta and will be brought back to B.C. to face charges

Joe Fast of Abbotsford is on dialysis four days a week and has issued a public plea for a kidney donor. (Submitted photo)
Abbotsford man with 5% kidney function is desperately in need of a live donor

Joe Fast has a rare blood type and hasn’t yet been able to find a transplant match

Melissa David, of Parachutes for Pets and her dogs Hudson and Charlie are trying to raise money for a homeless shelter that will allow pets and are seen in Calgary, Alta., Thursday, Feb. 6, 2020.THE CANADIAN PRESS/Jeff McIntosh
‘My only wish:’ Children asking pet charity to help their furry friends at Christmas

Parachutes for Pets says it has received 14 letters from children in the last week

Melissa Velden and her chef-husband Chris Velden, stand in their dining room at the Flying Apron Inn and Cookery in Summerville, N.S. on Friday, Nov. 20, 2020. The couple is hosting holiday parties with appropriate distancing and other COVID-19 health protocols in place at their restaurant. THE CANADIAN PRESS/Andrew Vaughan
Celebrities, Santa and Zoom part of office holiday parties being held amid COVID-19

Many will send tokens of appreciation to workers or offer time off or cash

Most Read