After three years of high vulnerability, Vancouver presents evidence of moderate vulnerability, while the rest of Canada continues to exhibit a moderate degree of vulnerability, according to a recent Canada Mortgage and Housing Corporation (CMHC) Housing Market Assessment (HMA).
After ten straight quarters with a high degree of vulnerability, this is the second consecutive quarter with a moderate rating as overvaluation continues in Canada.
As prices persist to adjust and fundamentals catch up, the corporation suggests that income and population imbalances between house prices and housing market fundamentals have narrowed.
“For the second consecutive quarter, moderate evidence of overvaluation continues to be the only sign of vulnerability for Canada as a whole. Imbalances between house prices and housing market fundamentals have narrowed with declining home prices in the resale market and a growing pool of potential first-time homebuyers. This dynamic contributes to closing the overvaluation gap,” said Bob Dugan, Chief Economist, Canada Mortgage and Housing Corporation.
In Vancouver, the past three years saw housing market rates change to moderate after being assessed at a high degree of overall vulnerability. CMHC says evidence of price acceleration has eased to low.
According to the HMA report, Toronto, Hamilton and Victoria maintain a high degree of overall vulnerability. However, conditions of overheating, price acceleration and overvaluation are showing signs of easing in all three centres.
CMHC additionally states that Edmonton, Calgary, Saskatoon, Regina and Winnipeg continue to see a moderate degree of vulnerability in the overall assessment, due to overbuilding.
Although overheating conditions continue in Montréal and Moncton, and overbuilding in St. John’s, Ottawa, Montréal, Québec City, Moncton, Halifax and St. John’s maintain a low degree of overall vulnerability.