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

“Let’s break the silence because we can”

Missing and Murdered Indigenous Women’s awareness walk held Saturday in Fort St. James

New community library aims to foster positive community feelings

Vanderhoof resident has set up a little library in front of her property at the end of Lebler Road.

Vanderhoof politician running for president of UBCM

Brian Frenkel, municipal councillor, was the first Vice-President for the Union of BC Municipalities in 2019.

“Nature defines my art”: Bethany Giesbrecht, painter

This story is part of a weekly series showcasing artists in the region

Vanderhoofian nominated for the Premier’s Awards

Phil Turgeon has been nominated by the Ministry of Children and Family Development under the Leadership category.

STANDING TALL: For some, B.C.’s forest industry is the best office in the world

A look at the forest sector in B.C. – and those hoping for the best – amid mill curtailments

Royal B.C. Museum wants B.C.’s COVID-19 nature observations

COVID-19 Collecting For Our Time: ongoing project cataloguing province’s pandemic experience

Feds offer ‘life preserver’ funds to BC Ferries as pandemic sinks revenue

For every dollar the province spends the federal government will match

Bad behaviour at B.C. restaurants ignites campaign calling for respect

“If you can’t follow the rules, then stay home,” says BC Restaurant and Foodservices Association

Over half of Americans oppose Trump tariff on Canadian aluminum: survey

The survey was conducted Aug. 7 to 9 among 1,513 Canadians and 1,003 Americans

Oh baby, what a birthday gift: $2.8M raised to help B.C. boy with rare disease

‘We are very thankful to everybody,’ Aryan Deol’s father says

‘Huckleberry’ the bear killed after B.C. residents admit to leaving garbage out for videos

North Shore Black Bear Society said it was local residents who created a ‘death sentence’ for bear

Police investigating after insults, expletives yelled at federal minister’s staff

A 90-second video circulating on social media appears to have been shot by the person who was yelling

5 B.C. First Nations call out Canada for ‘discriminatory’ food fish practices

West Coast nations say government ignoring court-won right to chinook and coho

Most Read