Overvaluation and Overbuilding Remain Prevalent in Canada’s Housing Markets

Published on by Communication service

Topic(s): Real estate

Source: SCHL

Overvaluation and Overbuilding Remain Prevalent in Canada’s Housing Markets

Overvaluation is detected in nine Census Metropolitan Areas (CMAs) and overbuilding in seven, according to the latest Housing Market Assessment(HMA) released today by the Canada Mortgage and Housing Corporation. Nationally, CMHC detects moderate evidence of overvaluation.

The HMA serves as an early warning system, alerting Canadians to areas of concern developing in our housing markets so that they may take action in a way that promotes market stability.

Report Highlights

  • Overvaluation and overbuilding remain the most prevalent problematic conditions observed across the 15 centres covered by the HMA.
  • Overvaluation is detected in nine centres while overbuilding is detected in seven.
  • The evidence of overvaluation has increased since the previous assessment in Vancouver, Hamilton, and Saskatoon.
  • Strong evidence of problematic conditions overall is seen in Toronto, Calgary, Saskatoon and Regina. In Toronto, this is due to the combination of price acceleration and overvaluation. In Calgary, Saskatoon and Regina, this is due to the combination of overvaluation and overbuilding.
  • Moderate evidence of problematic conditions overall is seen in Vancouver, Montreal, Edmonton, Ottawa, Winnipeg and Quebec.

CMHC defines evidence of problematic conditions as imbalances in the housing market. Imbalances occur when overbuilding, overvaluation, overheating and price acceleration, or combinations thereof depart significantly from historical averages. For examples, please consult the Overview section of the national report.

The complete HMA, including national, regional and CMA insight and analysis, is available here.

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