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Strong evidence of overall problematic conditions, with some centres showing improvement in housing market conditions


CMHC is reporting strong overall evidence of problematic housing market conditions nationally due to moderate evidence of overvaluation and price acceleration. This assessment largely reflects market conditions in Vancouver and Toronto and their neighbouring centres such as Victoria and Hamilton.

Evidence of overvaluation has moderated at the national level, but increased in Victoria since the previous assessment, where fundamentals are not keeping up with higher prices.

Due to improved balance between economic conditions and home prices in Regina, Montréal and Québec, evidence of overvaluation has been lowered in these three CMAs. This resulted in Regina now being assessed as having moderate overall evidence of problematic conditions and Montréal now shows weak overall evidence of problematic conditions.

In Moncton and St. John’s, the supply of homes is adjusting to the demand, resulting in a reduction from moderate to weak evidence of overbuilding.

Strong evidence of problematic conditions continue to be detected in Vancouver, Victoria, Toronto, Saskatoon and Hamilton.

Note 1: Colour codes indicate the level of evidence of problematic  conditions: The HMA reflects a comprehensive framework that not only tests for  the presence or incidence of signals of potentially problematic conditions, but  also considers the intensity of signals (that is, how far the indicator is from  its historical average) and the persistence of signals over time. Generally,  low intensity and persistence are associated with a lower potential of upcoming  problematic conditions. As the number of persistent signals increases, the  evidence of a problematic condition developing increases.

Note 2: Results at the CMA level are not segmented by housing type or  neighbourhood. They represent an assessment of the entire CMA. However,  specific CMA reports provide further detailed analysis of these markets.

Note 3: The colour scale extends to red only for those factors that have  multiple indicators signaling significant incidence, intensity and persistence  of potentially problematic conditions. As a result, only overvaluation and  overbuilding can receive a red rating, since they are assessed using more than  one indicator.

Note 4: To ensure the framework is as current as possible, on a regular  basis, we undertake a model selection process whereby our house price models  for overvaluation are tested for statistical significance at the national and  CMA level. The result of this process may change the number of indicators of a  problematic condition from the previous assessment.

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