The housing market maintains a “moderate degree” of overall vulnerability, according to the Canada Mortgage and Housing Corporation (CMHC)’s Housing Market Assessment.

While the economy and population growth continue to support the market, valuations remain on an uptrend, said CMHC Chief Economist Bob Dugan.

“Increases in actual, inflation-adjusted house prices in the market were larger than the increase that can be explained by these housing market fundamentals, so there’s a slight increase in the average estimate of overvaluation during the quarter,” he told The Canadian Press.

CMHC lowered the overall vulnerability from moderate to low in several markets in the Prairies, including Saskatoon, Edmonton, Calgary, and Winnipeg.

There is still evidence of overheating and price acceleration in Toronto and Hamilton, while risks of overvaluation remain in Vancouver. Due to these, the three cities maintained their moderately vulnerable status.

Victoria is the only city tagged as highly vulnerable, mainly due to the apparent signs of imbalances in price acceleration and overvaluation.

On the other hand, cities such as Ottawa, Montréal, Québec, Moncton, Halifax, and St. John’s maintained their low degree of vulnerability. However, the report said evidence of overheating persists in Montréal and Moncton’s resale markets.

Is Canada’s Housing Market Still Vulnerable? by Gerv Tacadena | Canadian Real Estate Wealth