CMHC tracks 15 Canadian cities for signs of stress including overvaluation, sustained price acceleration, overbuilding and overheating when demand outpaces supply.
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As Canada’s authority on housing, CMHC contributes to the stability of the housing market and financial system, provides support for Canadians in housing need, and offers objective housing research and information to Canadian governments, consumers and the housing industry. BNN speaks with Peter Kinch, Mortgage advisor with Mortgage Alliance Canada, about the unintended effects of the tax and to what extent it really helps address B.C.’s dramatic home price gains.
The CMHC’s concerns extend beyond this country’s most-scrutinized markets.
“For Canada overall, we now detect strong evidence of overvaluation”, CMHC’s chief economist, Bob Dugan, said in a news release.
In its latest report, the Canada Mortgage and Housing Corporation said that in addition to Vancouver there was also strong evidence of imbalances in Toronto, Calgary, Saskatoon and Regina.
CMHC says evidence of overvaluation in the Hamilton market went from moderate in its April report to strong in its July release.
The agency defines evidence of problematic conditions as imbalances in the housing market.
“The level of evidence of problematic conditions for Vancouver has been raised to strong from moderate where we detect a combination of overheating, price acceleration, and overvaluation”, CMHC said.
A former Vancouver jail is being transformed into an affordable housing unit for the Downtown Eastside community.
Benchmark prices for single-family detached homes in Vancouver reached C$1.56 million ($1.18 million) in June, up 39 percent from a year earlier, according to broker figures.
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Rapidly rising prices in Canada’s largest cities may soon drag the entire national market into the strongly problematic category, the housing officials said.
