Prices easing but Vancouver’s housing market still ‘highly vulnerable:’ CMHC report

Home sales and prices are coming down in Vancouver, but it is still an overheated market, according to a Canada Mortgage and Housing Corporation’s latest look at stability in real estate markets across the country.

“Metro Vancouver’s housing market remains highly vulnerable despite softening prices in the resale market,” said Eric Bond, CMHC’s Vancouver-based analyst.

“There are imbalances even though prices are declining for properties in different segments, in the most recent quarter, because home price growth over the past few years has significantly outpaced local income growth.”

The CMHC’s Housing Market Assessment report released Thursday looked at overheating, price acceleration and overvaluation.

Overheating in the Vancouver market “was first detected” in the last quarter of 2015, according to the report.

Now, the sales-to-new-listings-ratio, which is a way of measuring the balance between demand and supply, is below the 75 per cent threshold designated by the CMHC to trigger an overheating warning.

However, the agency is maintaining Vancouver’s market is overheated because the CMHC model has a “persistence” rule defined by there being a trigger in at least one quarter in the previous three years. Also, even though the overall sales-to-new-listings ratio for Metro Vancouver has been dropping in 2018, the agency says they have varied widely depending on market location and type. The report first identified price acceleration in the Vancouver market in the second quarter of 2016.