{"id":9947,"date":"2018-08-03T10:10:27","date_gmt":"2018-08-03T17:10:27","guid":{"rendered":"http:\/\/www.roryc.ca\/blog\/?p=9947"},"modified":"2018-07-28T08:59:56","modified_gmt":"2018-07-28T15:59:56","slug":"4-cities-are-keeping-canadas-housing-market-in-highly-vulnerable-territory","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2018\/08\/4-cities-are-keeping-canadas-housing-market-in-highly-vulnerable-territory\/","title":{"rendered":"4 Cities Are Keeping Canada’s Housing Market in “Highly Vulnerable” Territory"},"content":{"rendered":"

For an eighth consecutive quarter, Canada\u2019s housing market remains highly vulnerable to instability thanks to moderate levels of price acceleration and overvaluation.<\/p>\n

In the first quarter of 2018, four of the country\u2019s real estate hot spots \u2014 Toronto, Vancouver, Victoria and Hamilton \u2014 were primarily responsible for keeping the national housing market in \u201cvulnerable\u201d territory, according to the Canada Mortgage and Housing Corporation\u2019s (CMHC) latest Housing Market Assessment, published Thursday.<\/p>\n

[I]t\u2019s mostly a reflection of conditions in the Toronto area and the Vancouver area,\u201d CMHC\u2019s Chief Economist Bob Dugan tells Livabl.<\/p>\n

\u201cThat\u2019s what\u2019s really driving the national result, those two areas where we\u2019re seeing overvaluation and price acceleration,\u201d he adds.<\/p>\n

Released on a quarterly basis, CMHC\u2019s report provides an in-depth outlook of vulnerabilities to housing market instability both on the national level and for 15 Census Metropolitan Areas. A market\u2019s degree of vulnerability (low, moderate, or high) is assessed using four factors: overheating, price acceleration, overvaluation and overbuilding.<\/p>\n

Out of the four highly vulnerable housing markets, high evidence of overvaluation was observed in Vancouver, Victoria and Toronto. During Q1 2018, house prices in these markets were not supported by fundamental drivers, such as income, mortgage rates and population, according to CMHC.<\/p>\n

\u201cIt\u2019s improving, but it\u2019s still overvaluation. And so the message is still that prices are high relative to fundamentals and it\u2019s just something we have to keep an eye on in those markets,\u201d says Dugan.<\/p>\n

In Vancouver, rising mortgage rates combined with price growth at the lower end of the resale market continue to support strong signs of overvaluation.<\/p>\n

Meanwhile, overvaluation persists in Toronto as strong demand for condos continues to drive price growth for this property type.<\/p>\n

\u201c[C]ondo apartments in Vancouver and Toronto have had much stronger price growth in the last little while than single-detached family homes. Prior to about a year-and-a-half ago was the opposite, it was more the single-family home market that was driving growth in prices,\u201d says Dugan.<\/p>\n

Overvaluation is not as much of a concern elsewhere in Canada, but evidence of overbuilding has been detected in Calgary, Edmonton, Saskatoon and Regina.<\/p>\n

These four centres scored a moderate degree of vulnerability as the inventory of completed and unsold housing units, and the vacancy rate for rental apartments, were above overbuilding thresholds.<\/p>\n

Dugan attributes overbuilding in these cities to the 2014 recession that significantly reduced housing demand.<\/p>\n

\u201cWhen the economy really slowed all of a sudden because of the oil price drop it took time for those units to complete, but once they completed there wasn\u2019t enough demand to absorb those units,\u201d says Dugan.<\/p>\n

In the first quarter of 2018, Montreal recorded a low degree of vulnerability but rapid price growth in certain neighbourhoods poses a concern for possible price acceleration in the future.<\/p>\n

4 Cities Are Keeping Canada’s Housing Market in “Highly Vulnerable” Territory<\/a> by Kerrisa Wilson | Livabl<\/p>\n","protected":false},"excerpt":{"rendered":"

For an eighth consecutive quarter, Canada\u2019s housing market remains highly vulnerable to instability thanks to moderate levels of price acceleration and overvaluation. In the first quarter of 2018, four of … [read more<\/a>]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[],"class_list":["post-9947","post","type-post","status-publish","format-standard","hentry","category-market-updates"],"yoast_head":"\n4 Cities Are Keeping Canada's Housing Market in "Highly Vulnerable" Territory • Rory C Real Estate | Oakwyn Realty<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.roryc.ca\/blog\/2018\/08\/4-cities-are-keeping-canadas-housing-market-in-highly-vulnerable-territory\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"4 Cities Are Keeping Canada's Housing Market in "Highly Vulnerable" Territory • Rory C Real Estate | Oakwyn Realty\" \/>\n<meta name=\"twitter:description\" content=\"For an eighth consecutive quarter, Canada\u2019s housing market remains highly vulnerable to instability thanks to moderate levels of price acceleration and overvaluation. 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