Canadian House Price Growth Remains Elevated: CMHC Reports
OTTAWA — Canada Mortgage and Housing Corporation (CMHC) is reporting strong overall evidence of problematic housing market conditions nationally for the second consecutive quarter due to overvaluation and price acceleration in Canada’s housing markets. This assessment largely accounts for market conditions in Vancouver and Toronto where strong price growth has been spreading to neighbouring centres such as Hamilton and Victoria.
Canada saw house prices grow by 7 per cent year-over-year at the end of the third quarter of 2016 after adjusting for inflation. However, removing Ontario from the calculation would have seen house prices remain flat through to the third quarter.
This analysis is the result of insight from CMHC’s quarterly Housing Market Assessment (HMA). 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.
- Overvaluation and overbuilding remain the most prevalent problematic conditions observed across the 15 centres covered by the HMA.
- Overvaluation and overbuilding are detected in 8 centres.
- Evidence of problematic conditions has increased in Victoria since the previous assessment due to moderate evidence of price acceleration and overvaluation.
- Evidence of problematic conditions has decreased in Calgary since the previous assessment as some housing markets in oil-dependent centres are now rebalancing.
- Strong evidence of problematic conditions continue to be detected in Vancouver, Toronto, Regina, Saskatoon and Hamilton.
Evidence of problematic conditions in Ottawa and Atlantic Canada remains weak.
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.