The Housing Market Assessment continues to indicate a moderate degree of overall market vulnerability at the national level. However, the gap between house prices and housing market fundamental factors has narrowed over the past year.

What is CMHC’s Housing Market Assessment?

The Housing Market Assessments (HMAs), published quarterly, analyze Canada’s housing markets and give a comprehensive view of these markets’ vulnerabilities. The HMAs consider 4 main factors: overheating, price acceleration, overvaluation and overbuilding. The information and analysis provided can help Canadians make informed decisions and contribute to an orderly adjustment of housing market imbalances.

We publish a national HMA, as well as separate HMAs for 15 census metropolitan areas (CMAs).

Highlights from the national HMA released in the third quarter of 2019

The latest edition of the national HMA is based on:

  • data up to the end of March 2019
  • market intelligence up to the end of June 2019

Some highlights:

  • Overall housing market vulnerability in Vancouver has eased to “moderate”, after being rated “high” for 12 straight quarters. The main reason for this change is that evidence of price acceleration has eased to “low”.
  • Overall vulnerability remains high for Toronto, Hamilton and Victoria. However, overheating, price acceleration and overvaluation show signs of easing in all 3 CMAs.
  • Edmonton, Calgary, Saskatoon, Regina and Winnipeg still show a moderate degree of overall vulnerability due to continued evidence of overbuilding.
  • Ottawa, Montréal, Québec City, Moncton, Halifax and St. John’s have maintained a low degree of overall vulnerability. However, overheating persists in Montréal and Moncton, as does overbuilding in St. John’s.

The gap between house prices and fundamentals has narrowed

For the last 2 quarters, the national housing market’s degree of overall vulnerability has been rated at “moderate”, This is after 10 straight quarters at a rating of “high”.

The average estimate of overvaluation stayed near 0 over the past year, suggesting improved alignment overall between house prices and housing market fundamentals.

The gap between prices and fundamentals has narrowed. Prices continue to decline, while fundamentals are rising. In the first quarter of 2019, the inflation-adjusted MLS® average price dropped by 5.6% from the same period in 2018. This was the fifth straight decline on a year-over-year basis.

Over the same period, the young adult population grew by 1.9%, enlarging the pool of potential first-time homebuyers. Meanwhile, after declining for 2 quarters, inflation-adjusted personal disposable income edged up by 0.2%.

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Date Published:: August 1, 2019