Canada’s housing-market vulnerability remains moderate

By Geraldine Grones

Canada’s housing market showed a moderate degree of vulnerability for the second straight quarter after 10 consecutive quarters of being rated highly vulnerable, according to the most recent Housing Market Assessment released by Canada Mortgage and Housing Corporation (CMHC) on Thursday.

"For the second consecutive quarter, moderate evidence of overvaluation continues to be the only sign of vulnerability for Canada as a whole,” said Bob Dugan, CMHC’s chief economist. “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."

After being assessed at a high degree of overall vulnerability for the past three years, Vancouver’s housing market rating has changed to moderate. Evidence of price acceleration has eased to low.

In Toronto, Hamilton and Victoria, a high degree of overall vulnerability remains. However, conditions of overheating, price acceleration and overvaluation show signs of easing in all three centres.

Edmonton, Calgary, Regina, Saskatoon and Winnipeg continue to see a moderate degree of vulnerability in the overall assessment due to overbuilding.

Meanwhile, Ottawa, Montreal, Quebec City, Moncton, Halifax and St. John’s maintain a low degree of overall vulnerability. However, overheating conditions persist in Montreal and Moncton, as well as overbuilding in St. John’s.

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