Victoria housing market remains overvalued: agency

Greater Victoria’s housing market is now “moderately overvalued,” a change from its status as being “highly overvalued,” according to the Canada Mortgage and Housing Corp.

The capital region and Toronto are the two areas among 15 in Canada to see their previous overvaluation rating changed to moderate from high.

Even so, the degree of overall vulnerability remains high in Vancouver, Victoria, Toronto and Hamilton, the federal agency said Thursday in its quarterly housing market assessment report.

Although those areas remain overvalued, it is easing, which is why Victoria is now holding a moderate rating.

That is because house prices are “moving closer to levels supported by housing market fundamentals such as population, personal disposable income, and interest rates,” CMHC said.

The federal body releases quarterly reports examining how many vulnerable markets are within the country. If an area is vulnerable, that means it is imbalanced, which can occur through overbuilding, overvaluation, overheating, and price acceleration.

“We are seeing overvaluation pressures unwinding in Toronto and Victoria, despite the fact that Canada’s overall vulnerability remains high,” said Bob Dugan, CMHC’s chief economist.