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

List of businesses and services now open in Ladysmith

The Chronicle is compiling on ongoing list of businesses in Ladysmith that are now open

Man claims Ladysmith Bylaw Officer accused him of ‘squatting’ at Transfer Beach

Remley believes the officer was profiling him because of his long hair and long beard

School district reveals restart plans for Nanaimo-Ladysmith

K-5 students will see two days of instruction a week, 6-12 students once a week

Ladysmith A&W plans community Rod Run for June 4

Cruisin’ the Dub will look a little different this year due to the COVID-19 pandemic

Ladysmith centenarian honoured with birthday parade

Kay Rozzano said she’s been looking forward to this birthday ‘for 100 years’

QUIZ: Test your knowledge of the world of summer sports

In a typical year, there are plenty of summer sporting events and tournaments held across Canada

Facing changes together: Your community, your journalists

We’re asking you to lock arms with us, as we look to better days ahead

‘We’re sick of it’: Anger over police killings shatters U.S.

Tens of thousands marched to protest the death of George Floyd

Surrey mayor’s party under fire for ‘sickening’ tweet accusing northern B.C. RCMP of murder

Mayor Doug McCallum says tweet, Facebook post ‘sent out by unauthorized person’

Father’s Day Walk Run for prostate cancer will be virtual event this year throughout B.C.

The annual fundraiser for Prostate Cancer Foundation BC has brought in $2.5 million since 1999

Dr. Bonnie Henry announces official ban on overnight kids’ camps this summer

New ban comes after talking with other provincial health officials across the country, Henry says

Senior man in hospital after unprovoked wolf attack near Prince Rupert

Conservation officers are on site looking for the wolf

VIDEO: NASA astronauts blast off into space on SpaceX rocket

Marks NASA’s first human spaceflight launched from U.S. soil in nearly a decade

‘I knew what he wanted’: Kootenay man spends hours in tree as black bear patrols below

Francis Levasseur is no stranger to the outdoors, but a recent run-in with a bear caused quite a scare

Most Read