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

RibFest Kelowna’s top moments

Take it in one last time, until next year

Lake Country woman advocates for district to build community park

A plot of land has recently become available

Newly-aquired Rockets defenceman invited to NHL rookie camp

Jake Lee has been added to the San Jose Sharks Rookie Tournament in September

VIDEO: Ride to Conquer Cancer rolls into Hope

Thousands of cyclist descend on small town for annual cancer fundraiser

VIDEO: Ride to Conquer Cancer rolls into Hope

Thousands of cyclist descend on small town for annual cancer fundraiser

Church building has been a landmark on Summerland’s Butler Street

Neighbourhood in Lowertown has gone through changes over the years.

Okanagan MMA fighter captures middleweight belt at home

Jordan Cabrejos scores victory at XFC Unbanned, the return of mixed martial arts to Vernon

B.C. VIEWS: Pipelines set to roll as federal politicians posture

Projects to drive B.C., Canadian economy in years ahead

B.C. Lions fall to 1-9 after 13-10 loss to Ticats

Lowly Leos have dropped six straight CFL contests

Man shot near Coalmont airlifted to hospital

A man was shot near Coalmont B.C. Saturday afternoon. The victim was… Continue reading

VIDEO: B.C. woman meets biological mother, 38 years later

Mother never gave up hope of finding daughter, despite all the obstacles

B.C. man who died after rescuing swimmer was known for helping others

Shaun Nugent described as a dad, a coach, a hero and ‘stand-up guy’ at celebration of life

Most Read