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

Short bench for tournament host Queens

Rebuiling year sees club wind up seventh

Town selling the airport to Ponoka Flying Club

Agreement is for 25 years with option to buy back

RCMP on hunt for man who has skipped court

Public urged to call 911 if they spot him

Update: Local bull riders help Canada to fourth at PBR Global Cup

Lambert, Hansen manage to earn two of Canadian team’s good rides

Blair says RCMP have met Wet’suwet’en conditions, calls for end to blockades

The Wet’suwet’en’s hereditary chiefs oppose the Coastal GasLink project

Portrait of the Coastal GasLink, a pipeline to divide a nation

In mid-February, 46 per cent of the pipeline route had been cleared

Alberta ends master agreement with doctors, new rules to be in place April 1

The current master agreement with physicians ends March 31

Alberta rail conductor fired for social media posts awarded money, but not reinstatement

Arbitrator Richard Hornung says that he agreed with the Teamsters union

Kids exposed to household cleaners as newborns more likely to get asthma: study

Air fresheners, plug-in deodorizers, antimicrobial hand sanitizers and oven cleaners were the worst culprits

Burger King breaks the mould with new advertising campaign

The company is known for irreverent ad campaigns

PHOTOS: RCMP call on kids to name latest police puppy recruits

This year’s theme is the letter ‘N,’ and 13 German shephards must be named

Federal minister pledges to meet Wet’suwet’en chiefs in B.C. over natural gas pipeline

The Wet’suwet’en hereditary chiefs say they are visiting Mohawk territory

Pipeline dispute: Tories put no-confidence motion on House of Commons agenda

Conservatives say they have no confidence in the Trudeau government to end the rail blockades

Most Read