CMHC says many major housing markets showing signs of overvaluation

Canada's national housing agency says nine of Canada's 15 largest housing markets are showing signs of being overvalued.

CMHC says most Canadian housing markets showing signs of overvaluation

Nine of the 15 largest Canadian housing markets are showing some signs of overvaluation, the CMHC said. (CBC)

Canada's national housing agency says nine of Canada's 15 largest housing markets are showing signs of being overvalued.

The Canada Mortgage and Housing Corporation said in its quarterly Housing Market Assessment Wednesday that a majority of Canada's large housing markets are showing either "moderate" or "strong" evidence of being overvalued.

The housing agency looks at housing markets to gauge their health based on four factors:

  • overheating — when demand is significantly and persistently outpacing supply
  • overvalued — when prices are higher than they should be based on economic fundamentals
  • accelerating — when house prices are increasing faster than household costs of living are
  • overbuilding — when supply of new homes significantly outpaces demand.

The agency rates each market on a colour coded scale where green means there is little evidence of that factor, yellow means there is moderate evidence of it and red means there is strong evidence of it.

On the overvaluation front, the CMHC says there is moderate or strong evidence of that happening in Vancouver, Edmonton, Calgary, Saskatoon, Regina, Hamilton, Toronto, Montreal and Quebec City.

Four of those cities — Toronto, Quebec City, Vancouver and Saskatoon — now show "strong" signs of overvaluation.

The first two were singled out in the agency's last report on housing in January. But the latter two were only recently given their red warning on overvaluation.

In Vancouver's case, the housing agency said "Single-detached home prices are now observed to be at levels higher than those consistent with financial, economic and demographic fundamentals."

But the problem in Saskatoon, meanwhile, is tied to recent downward revisions to the area's population, which makes it harder to justify. House prices in the greater Saskatoon area declined 2.7 per cent in March, data from the Canadian Real Estate Association showed.

Across the country, Canada's housing market set a record last month both in terms of prices — now up to $508,567, on average — and the volume of sales, CREA said.

Aside from overvaluation in pockets, the CMHC's assessment sees little cause for concern nationally. "Overheating and acceleration in house prices are not a concern at this time," the CMHC said.


To encourage thoughtful and respectful conversations, first and last names will appear with each submission to CBC/Radio-Canada's online communities (except in children and youth-oriented communities). Pseudonyms will no longer be permitted.

By submitting a comment, you accept that CBC has the right to reproduce and publish that comment in whole or in part, in any manner CBC chooses. Please note that CBC does not endorse the opinions expressed in comments. Comments on this story are moderated according to our Submission Guidelines. Comments are welcome while open. We reserve the right to close comments at any time.

Become a CBC Member

Join the conversation  Create account

Already have an account?