Too pricey, too many: CMHC reports 'moderate' problems in housing market

January 27, 2016, CTV News - Canada's major housing markets show "moderate" evidence of overvaluation and overbuilding, according to the Canadian Mortgage and Housing Corporation.

A first-quarter CMHC report found properties were generally overvalued in eight of 15 centres it analyzed through its housing market assessment. Seven centres also showed problematic signs of overbuilding, according to the report.

Overvaluation refers to inflated housing prices, while overbuilding means more homes have been built in an area than are necessary.

The most significant trouble signs were detected out West, in Calgary, Saskatoon and Regina, where the CMHC detected "strong overall evidence" of overbuilding and overvaluation.

"Inventory management is becoming important," Bob Dugan, the CMHC's chief economist, said in a statement.

The organization cited sagging oil prices, migration and poor employment numbers out West as primary reasons for the region's housing market problems.

In Ontario, Ottawa showed its overbuilding problems have grown worse, when compared to previous numbers.

Toronto demonstrated "price acceleration and overvaluation," with the potential for overbuilding becoming a problem "due to the high number of condominium units under construction."

The CMHC suggests Toronto's problems could become worse, if condos currently under construction remain unsold after they're built.

Winnipeg's housing market moved in a healthy direction when compared to the CMHC's last report. The organization downgraded Winnipeg's overvaluation problem from strong to moderate.

Montreal, Edmonton, Ottawa, Winnipeg and Quebec City were found to demonstrate moderate problematic housing conditions.

Victoria, Vancouver, Hamilton, Moncton, Halifax and St. John's were considered markets with weak signs of problematic conditions.

The CMHC regularly examines housing markets in Victoria, Vancouver, Edmonton, Calgary, Regina, Saskatoon, Winnipeg, Hamilton, Toronto, Ottawa, Montreal, Quebec City, Moncton, Halifax and St. John's.

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