City real estate cooling, says CMHC report

Hamilton’s housing market — along with Toronto, Vancouver and Victoria — continues to have a “high degree of vulnerability” because prices are out of sync with incomes, but a new CMHC report says there are signs it is cooling down.

“Overvaluation is still detected in all these centres, but house prices are moving closer to levels supported by housing market fundamentals,” says the Canada Mortgage and Housing Corp. Housing Market Assessment report.

In Hamilton, the report says, “overheating and price acceleration continue” even though there was some “easing over the past few quarters, moderate evidence of overvaluation is still detected.”

Senior market analyst for the CMHC Anthony Passarelli says, “We’re still saying the housing market in Hamilton has vulnerability. And while we haven’t really changed the assessment, we have noticed that since the second quarter of 2017, the overvaluation has been starting to come back down.

“Prices are starting to work their way back to being closer to where our models say they should be closer to income, and population.”

The CMHC report is consistent with the latest Realtors’ Association of Hamilton-Burlington monthly report for January that said local real estate is stabilizing into a more balanced market that equally favours sellers and buyers.

“This is a promising start to 2019,” said the association’s CEO George O’Neill. “For sellers, the average price of a home has increased over 100 per cent since 2009. For buyers, sales activity has slowed, the number of new listings has increased, and we are sitting firmly in a balanced market.”

January figures show a 3.6 per cent decline in sales.