Canada Mortgage and Housing Corporation

Canada Mortgage and Housing Corporation

January 26, 2017 12:00 ET

Canadian House Price Growth Remains Elevated: CMHC Reports

OTTAWA, ONTARIO--(Marketwired - Jan. 26, 2017) - Canada Mortgage and Housing Corporation (CMHC) is reporting strong overall evidence of problematic housing market conditions nationally for the second consecutive quarter due to overvaluation and price acceleration in Canada's housing markets. This assessment largely accounts for market conditions in Vancouver and Toronto where strong price growth has been spreading to neighbouring centres such as Hamilton and Victoria.

Canada saw house prices grow by 7 per cent year-over-year at the end of the third quarter of 2016 after adjusting for inflation. However, removing Ontario from the calculation would have seen house prices remain flat through to the third quarter.

This analysis is the result of insight from CMHC's quarterly Housing Market Assessment (HMA). The HMA serves as an early warning system, alerting Canadians to areas of concern developing in our housing markets so that they may take action in a way that promotes market stability.

Report Highlights

  • Overvaluation and overbuilding remain the most prevalent problematic conditions observed across the 15 centres covered by the HMA.
  • Overvaluation and overbuilding are detected in 8 centres.
  • Evidence of problematic conditions has increased in Victoria since the previous assessment due to moderate evidence of price acceleration and overvaluation.
  • Evidence of problematic conditions has decreased in Calgary since the previous assessment as some housing markets in oil-dependent centres are now rebalancing.
  • Strong evidence of problematic conditions continue to be detected in Vancouver, Toronto, Regina, Saskatoon and Hamilton.
  • Evidence of problematic conditions in Ottawa and Atlantic Canada remains weak.

CMHC defines evidence of problematic conditions as imbalances in the housing market. Imbalances occur when overbuilding, overvaluation, overheating and price acceleration, or combinations thereof depart significantly from historical averages. For examples, please consult the Overview section of the national report.

This release includes video.

The complete HMA, including national, regional and CMA insight and analysis, is available on our website. To access future CMHC market analysis reports, subscribe to Housing Observer Online.

As Canada's authority on housing, CMHC contributes to the stability of the housing market and financial system, provides support for Canadians in housing need, and offers objective housing research and information to Canadian governments, consumers and the housing industry.

For more information, visit our website or follow us on Twitter, YouTube, LinkedIn and Facebook.


"We continue to detect strong evidence of problematic conditions in Canada. Price acceleration in Vancouver, Victoria, Toronto and Hamilton indicates that home price growth may be driven by speculation as it is outpacing what economic fundamentals like migration, employment and income can support. For this reason, home buyers should ensure that their purchases are aligned with their needs as well as the long-term market outlook."

Bob Dugan, Chief Economist, Canada Mortgage and Housing Corporation

"As Calgary home prices have become more in-line with economic and demographic fundamentals, our overall assessment posted an improvement from strong to moderate evidence of problematic conditions. However, overbuilding is still a concern as Calgary's rental apartment vacancy rate remains at an elevated level."

Richard Cho, CMHC Market Analyst, Calgary


CMHC's HMA analytical framework is designed to evaluate the extent to which there is evidence of problematic conditions in Canadian housing markets. The framework assesses housing market conditions and considers the incidence, intensity and persistence of four main factors:

  1. Overheating of demand in the housing market, wherein sales significantly outpace new listings.
  2. Acceleration in house prices, which could be partially reflective of speculative activity.
  3. Overvaluation in the level of house prices, which indicates that house price levels are not fully supported by fundamental drivers such as income, mortgage rates and population.
  4. Overbuilding of the housing market, when the rental market vacancy rate and/or the inventory of newly built housing units that are unsold is elevated.

Each of these factors is measured using one or more indicators of housing demand, supply and/or price conditions.

Table 1: Comparisons between the October 2016 and January 2017 reports is available at the following link:

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