OTTAWA, ONTARIO--(Marketwired - Aug. 13, 2015) - Canada Mortgage and Housing Corporation (CMHC) released updated results today from its House Price Analysis and Assessment (HPAA) framework, which is designed to detect the presence of problematic conditions in Canadian housing markets.
The overall assessment of risk detected by the framework is high for Toronto, Winnipeg and Regina. In Toronto, the high overall risk reflects a combination of price acceleration and overvaluation. The high level of risk in Winnipeg reflects risks of overvaluation and overbuilding, while in Regina it reflects price acceleration, overvaluation and overbuilding, particularly of condominium apartments.
"Nationally, CMHC continues to detect a modest risk of overvaluation. However, our overall assessment of the risk of problematic conditions varies from centre to centre due to regional differences in housing markets. Imbalances in local housing markets could be resolved with further moderation in house prices or improving economic conditions," said Bob Dugan, CMHC's Chief Economist.
"In the case of Toronto, strong price acceleration in 2015 reflects a larger share of sales of pricier homes. The rise in house prices have not been matched by growth in personal disposable income, giving rise to a modest risk of overvaluation".
The risk of problematic market conditions continues to be assessed as moderate for Montréal and Québec due to the detection of some risk of overvaluation.
In Toronto, Ottawa and Montréal, we are monitoring the risk of overbuilding. Condominium units under construction are near historical peaks. Inventory management is therefore necessary to make sure that these condominium units under construction do not remain unsold upon completion.
Low overall housing market risk is observed for Vancouver, as none of the individual risk factors are currently detected.
The results released today include those for the national market as well as 15 Census Metropolitan Areas (CMAs) - Vancouver, Victoria, Calgary, Edmonton, Regina, Saskatoon, Winnipeg, Toronto, Hamilton, Ottawa, Montréal, Québec, Moncton, St. John's and Halifax (with Victoria, Hamilton and Moncton being added from the previous report released in April).
The centres recently added, Victoria, Hamilton and Moncton are assessed as low overall risk. None of the risk factors are detected in Victoria, while overheating is detected in Hamilton, and overbuilding in Moncton.
The HPAA is a comprehensive framework that is designed to assess housing market conditions by taking into consideration the economic, financial and demographic drivers of housing markets. The use of multiple indicators of housing conditions, which incorporate various data sources and price measures, provides a robust picture of overall housing market conditions.
Media are invited to participate in a conference call today as CMHC's Chief Economist Bob Dugan, as well as CMHC regional economists and key market analysts will discuss the HPAA methodology and results.
Media may dial 800-499-4035 to join the call that will begin at 12:30 pm (EST).
Additional information explaining the results for the 15 CMAs is available in the attached backgrounder. As well, the full text of the latest HPPA update is available in the August supplement of Housing Now - Canada Edition at http://www.cmhc.ca/HPAA .
This is the third release of the HPAA, a quarterly report. The next HPAA report is expected to be released in October.
As Canada's authority on housing, CMHC continually works to increase the amount of available data and analysis on the housing market.
CMHC draws on more than 65 years of experience to help Canadians access a variety of high quality, environmentally sustainable and affordable housing solutions. CMHC also provides reliable, impartial and up-to-date housing market reports, analysis and knowledge to support and assist consumers and the housing industry in making informed decisions.
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For more information see the attached Backgrounder (http://media3.marketwire.com/docs/1021304e.pdf)
Contact Information:
CMHC Media Relations
(613) 740-5413
kjleblan@cmhc-schl.gc.ca