Affordability in Vancouver and Toronto, the rental market balance in Calgary, and levels of multifamily construction in four major markets; all highlighted as significant risks to the housing market by RBC Economics.

In its January Canadian Housing Health Check, economists highlight concerns about the market but say that overall there is “little indication that any major market faces a potentially destabilizing downturn in the near term.”

The report notes that Vancouver’s price rise have been moderated and that the 15 per cent foreign buyers’ tax appears to be adjusting the market; however, it says that Toronto’s housing market is showing signs of overheating.

RBC’s economists believe that the risk of government measures to tackle housing affordability remain “elevated”, especially for Toronto, and although there is a possibility that interest rates could be increased this is not expected in 2017.

The lender’s affordability measure for the third quarter of 2016 was 44.3 per cent nationally and it sees a reading above 45 per cent as the “danger zone.”

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