The CMHC’s early-warning system of problems in Canada’s housing markets continues to show “strong evidence of problematic conditions” but there is some improvement.

The agency has published its latest Housing Market Assessment and while the ‘red flag’ for market imbalances remains, the footprint of the potential issues has narrowed.

CMHC says that 6 of the 15 metros assessed show evidence of overvaluation, down from 8 in its previous report. That means that the national level is reduced from strong to moderate.

Regina, Montreal and Quebec have all seen conditions improve relating to prices but Victoria has been moved from moderate to strong evidence of overvaluation.

The BC capital is also showing moderate evidence of price acceleration and overheating, which has led CMHC to raise the overall assessment for the city to strong evidence of problematic conditions.

Overbuilding has improved in Moncton and St. John’s, taking the number of cities flagged to 6 from the previous assessment of 8. The Prairies are flagged for overbuilding.

The report also highlights price acceleration, overvaluation and overheating in Toronto and Hamilton while demand outpaces supply in rental, resale and new home markets.

Vancouver continues to show problematic conditions with evidence of moderate price acceleration and strong overvaluation.

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