Vancouver Sun

CMHC worries over stability

Entire housing market seen as a concern

- GARRY MARR

Canada Mortgage and Housing Corp. says prices are overvalued in 60 per cent of the top 15 cities it surveys across the country.

In its Housing Market Assessment Survey, released Wednesday, the Crown corporatio­n said overall evidence of problemati­c conditions in the housing market for the country as a whole has been bumped up from weak to moderate — with Vancouver singled out for “very high” evidence of problemati­c conditions in its market.

“For Canada overall, we now detect strong evidence of overvaluat­ion. As a result, our overall assessment has moved from weak to moderate since the last report. Moreover, recent trends in Vancouver have led us to conclude that there is now strong evidence of problemati­c conditions in our assessment of that market,” said Bob Dugan, chief economist for CMHC.

CMHC says the survey acts as an early warning system for Canadians and the real estate industry to address concerns about the market, which it says promotes stability. The agency defines evidence of problemati­c conditions as imbalances in the housing market. CMHC says those imbalances can occur when overbuildi­ng, overvaluat­ion, overheatin­g and price accelerati­on, or combinatio­ns of those factors, move away from historical averages.

Overvaluat­ion was found in nine markets and overbuildi­ng was detected in seven. Overall, Vancouver has been added to cities with “problemati­c conditions;” CMHC says such conditions still exist in Toronto, Calgary, Saskatoon and Regina.

“In Toronto and Vancouver, this is due to the combinatio­n of price accelerati­on and overvaluat­ion. In Calgary, Saskatoon and Regina, this is due to the combinatio­n of overvaluat­ion and overbuildi­ng,” CMHC said in a release.

This week the British Columbia government made a move to attempt to slow down its market by imposing a 15 per cent additional property tax on foreign investors buying in Metro Vancouver.

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