House prices fairly stable: CMHC report

Buyers and sellers in Metro Vancouver's real estate markets stepped back during the early months of the COVID-19 pandemic, and the region remains at only moderate risk of a price correction, according to a report from the Canada Mortgage and Housing Corp.

There were few signs of price rises during the months of April, May and June, according to CMHC's second-quarter Housing Market Assessment, and little evidence of increasing overvaluation, but there are signals of some changing trends, said Braden Batch, a CMHC senior analyst.

“The main take-away is that the data that we saw, so far, doesn't say that there is a big gap between (market conditions) we observed and where prices are,” Batch said. “We did witness there is the trend that the gap is growing.”

Between April and the end of June, Batch said buyers and sellers “sort of just put it on pause” in Metro Vancouver markets, primarily because of the pandemic lockdown.

Since the period covered in the report, Batch said, buyers and sellers have returned to the market and he said that some of the sales seen during the more active months represent transactions that were delayed by the lockdown.

In May and June, CMHC issued a warning that unemployment sparked by the pandemic would drag prices down. In the short term, however, Batch said analysts have not seen deep reductions in household income that would dent property markets.