As demand for attached homes grew in the Lower Mainland in 2017’s second quarter, the market showed moderate signs of overheating, according to a Canada Mortgage and Housing Corporation report released July 26.

Multiple-offer situations increased in the quarter, leading to the change from Q1, in which the CMHC found little evidence the market was overheated. A market is considered to be overheated when demand significantly and continuously outpaces supply; this is measured by comparing the ratio of sales to new listings.

“Townhomes and apartments, which typically sell for less than single-detached homes, were in high demand for first-time buyers and families,” said CMHC principal market analyst for Vancouver Eric Bond.

“The market continues to see moderate price acceleration and overvaluation due to low supply, despite record-level construction.”

The overall assessment of the Vancouver housing market remains “strongly problematic,” largely because homes in the city are overvalued, according to the report. This means “house prices remain significantly above the levels warranted by fundamental drivers of housing markets such as income, population and actual and expected financing costs,” the organization said in its report.

CMHC : Vancouver Home Market Showing Moderate Evidence of Overheating by Emma Crawford Hampel | Business in Vancouver