Skip to content
CMHC Home Canada Mortgage
and Housing Corporation
  • Sign In or Register
  • Français
  • MENU
MENU
× Français
  • Home
  • Professionals
    • Project funding and mortgage financing
      • Funding programs
        • Affordable Housing Fund
        • Affordable Housing Innovation Fund
        • Apartment Construction Loan Program
        • Canada Greener Affordable Housing
        • Community (social) housing
        • Federal Lands Initiative
        • Funding for Indigenous housing
        • Housing Supply Challenge
        • Innovation and research
        • National Housing Strategy Project Profiles
        • Rapid Housing Initiative
      • Mortgage Loan Insurance Products
        • Homeowner and Small Rental Mortgage Loan Insurance
          • CMHC Purchase
          • CMHC Improvement
          • CMHC Income Property
          • CMHC Refinance
          • CMHC Newcomers
          • CMHC Self-Employed
          • CMHC Portability
          • Eco Products for Lenders
        • Multi-Unit and Rental Housing
          • MLI Select
        • Default, claims and properties for sale
        • Underwriting centre
        • emili
        • NHA approved lenders
        • Calculating GDS / TDS
        • How to recognize and report mortgage fraud
        • Contact mortgage loan insurance
        • Insured Mortgage Purchase Program (IMPP)
      • Securitization
        • NHA Mortgage Backed Securities
        • Canada Mortgage Bonds
        • Canadian registered covered bonds
        • Blockchain in the housing industry
    • Housing markets, data and research
      • CMHC Reports Calendar
      • Housing markets
        • Housing market reports
        • Mortgage market and consumer reports
        • Fall 2024 Rental Market Report
      • Housing research
        • Consultations
          • Prohibition on the Purchase of Residential Property by Non-Canadians Act
            • Prohibition on the Purchase of Residential Property by Non-Canadians Act – Frequently asked questions
        • Housing research reports
        • Housing surveys
          • Mortgage consumer surveys
        • Research awards and scholarships
        • Understanding core housing need
        • Collaborative Housing Research Network
      • Housing data
        • Data tables
          • Household characteristics data
          • Housing market data
          • Mortgage and debt data
          • Rental market data
        • Housing market information portal
        • Residential Mortgage Industry Data Dashboard
        • CMHC licence agreement for the use of data
        • Housing Knowledge Centre
    • Industry innovation and leadership
      • Housing innovation
      • Our Partners
        • Partnerships
        • Federal, Provincial and Territorial Forum on Housing
      • Industry collaboration
        • Expert Community on Housing (ECoH)
      • Industry expertise
        • Affordable housing
        • Indigenous housing
        • Senior housing
        • Accessible and adaptable housing
        • Developing sustainable housing
        • Resources for mortgage professionals
        • CMHC newsletters
    • Events and speakers
      • Conferences
        • 2024 National Housing Conference
          • About
          • National Housing Conference - Agenda
          • Location
          • InnoZone
          • Details for participants
      • Speakers’ bureau
        • Kevin Hughes
  • Consumers
    • Buying a home
      • Homebuying calculators
        • Mortgage calculator
        • Affordability calculator
        • Debt service calculator
      • Buying guides
        • Homebuying step by step
        • CMHC's condominium buyer's guide
      • Mortgage loan insurance for consumers
        • What is CMHC mortgage loan insurance?
        • Do I qualify for mortgage loan insurance?
        • CMHC mortgage loan insurance costs
        • CMHC's Eco Products
          • CMHC’s Eco Improvement
          • CMHC Eco Plus
        • CMHC — home renovation financing options
        • FAQs — mortgage loan insurance
      • Incentives for homebuyers
      • Newcomers
      • The First-Time Home Buyer Incentive
    • Owning a home
      • Manage your mortgage
        • Mortgage fraud
        • Mortgage planning tips
        • Plan and manage your mortgage
        • Your credit report
        • Your home value
      • Aging in place
        • Housing options for Seniors
        • Housing and finance tips
        • Mortgage financing options for people 55+
        • Preventing fraud and financial abuse
    • Renting a home
      • I want to rent
        • Things to consider before renting
        • Types of housing for rent in Canada
        • Finding or advertising a rental property
        • Visiting the rental property
        • Lease and rental agreements
        • Signing the lease
        • Credit checks and bad credit
        • Rental payments and deposits
        • Roommates and pets
      • I am renting
        • Moving day
        • Landlord/Tenant responsibilities
        • Inspections
        • Maintenance and repairs
        • Complaints and evictions
        • Rent increases
        • When you can't pay rent
        • Renewing or terminating the lease
        • Moving out
      • One-Time Top-Up to the Canada Housing Benefit
      • COVID‑19: eviction bans and suspensions to support renters
  • About CMHC
    • CMHC’s goals, values and commitment to housing
    • Discover Life at CMHC
    • Management and governance
      • Speakers’ bureau
      • CMHC's Annual Public Meeting
      • CMHC’s board of directors and committees
      • Our management committee
      • Pension governance
        • Pension overview
        • Key roles and responsibilities
        • Annual reports
    • Corporate reporting
      • CMHC’s 2023 Annual Report
      • Program evaluation
      • Quarterly financial reports
      • Joint auditors special examination report to CMHC board 2018
      • CMHC’s Insured Mortgage Deferral
      • Corporate Plan Summary
      • Transparency
        • Access to information and privacy protection
        • Accessibility at CMHC
        • Accessibility feedback process
        • Briefing materials
        • Procurement
          • Vendor Diversity Program
        • Travel, hospitality and conference expenditures
    • Contact us
      • Contact mortgage loan insurance
      • Regional offices
      • Granville lsland
      • Indigenous and the North Housing Solutions
      • National office
      • Holiday service hours
  • Media Newsroom
  • National Housing Strategy
    • What is the strategy?
      • About the initiatives
      • How to apply
      • Help and resources
      • Priority areas for action
      • The National Housing Strategy Glossary of Common Terms
      • The Strategy in Action
    • Federal/Provincial/Territorial housing agreements
    • Other funding and financing opportunities
  • The Housing Observer
  • Canada’s Housing Podcast
  • Careers
  • Housing Knowledge Centre
 
  • Home
  • The Housing Observer
  • The effect of COVID-19 on CMHC’s Housing Market Assessments
  • Save
  • Share

The Effect of COVID-19 on CMHC’s Housing Market Assessments

October 8, 2020

Save Icon

SAVE TO MY FOLDER

The Effect of COVID-19 on CMHC’s Housing Market Assessments

SAVE
Close this Window   |   Manage my Folder
Save Icon

SAVE TO MY FOLDER

The Effect of COVID-19 on CMHC’s Housing Market Assessments

Done Done!
Close this Window   |   Manage my Folder
Share icon

Share via

  • Facebook
  • LinkedIn
  • Mail
  • print
  • CopyLink

SuccessCopyLinkVersionLink copied

Share icon

Share via

  • Facebook
  • LinkedIn
  • Mail
  • print
  • CopyLink

SuccessCopyLinkVersionLink copied

share icon

Mail-blue Share via Email

Did You Know?

You can include an email signature?

Register | Sign In

×
Google Captcha Loader
share icon

Mail-blue Share via Email

Done Done!
Close this window

Concerns about long-term stability of the housing market

The third quarter Housing Market Assessment 2020 has been released.  In this report, we’re still concerned about the long-term stability of the housing market. With the unprecedented shock from COVID-19, we face risks not previously factored into the Housing Market Assessment framework. However, the HMA remains useful in thinking through the risks.

The framework uses several metrics to assess whether there were significant imbalances in the housing market. These metrics include: home prices, household income, mortgage rates, various housing market indicators such as vacancy rate, sale-to-listing ratios, etc.

We’ve seen imbalances before in the housing market

Canada experienced significant imbalances in the late 1980s and in 2008/2009. To detect such risks of instability, the Housing Market Assessment relies on:

  • sound underlying data 
  • the assumption that historical relationships between housing prices and fundamental drivers of housing markets have not changed substantially
  • the fact that imbalances build up over time

Each of these has been affected by COVID-19.

COVID-19 has changed the way we do business in the short-term

In economic timelines, the shock from COVID-19 was instantaneous as governments moved to reduce face-to-face activity. Housing transactions disappeared almost overnight. The way we do business has changed. This made it difficult to evaluate whether prices were giving meaningful signals of what was happening in the housing market.

A particular concern in the Housing Market Assessment framework was that actions to reduce the spread of COVID-19 led to sharp income losses. Governments offset such losses through various policy measures to support income levels. This substitution of temporary income support makes us cautious that reported levels of disposable income can support the housing market.

We’re seeing many households with temporary income while home buying is based on long-term needs

Households make decisions on housing based on what they expect their expenditures and long-term income to be. It’s not based on short-term gains or losses. Households make decisions on permanent lifecycle income.

  • Permanent, in the sense of not including transitory windfall gains.
  • Lifecycle, meaning meeting the long-term needs of the household.

In the Housing Market Assessment framework, we look at income across Census Metropolitan Areas (CMAs). More of the income now recorded for CMAs is temporary. This doesn’t support the long-term housing market. Consider this:

  • Disposable income forms the foundation of buying a home. 
  • Temporary income supports are reported as disposable income.

What this means is that the level of long-term, permanent disposable income available to households, may be overstated. 

Q2 2020 overvaluation is likely underestimated

As a result, the level of overvaluation in the second quarter of 2020, in all regions across Canada is likely underestimated. Although reported disposable income may be high, some households may not feel confident in making long-term decisions on housing. Such confidence may fall as the pandemic moves into a second wave.

This risk is one of many reasons why CMHC remains concerned about the long-term stability of the housing market. Particularly at this time of heightened uncertainty and concern. Currently, there are significant short-term risks. However, as the economy recovers, traditional underlying economic relationships will reassert themselves, and value of the HMA will be restored.

Download the report

We want your feedback!

What can CMHC do to make the insights in the Housing Market Assessment better? Take a short survey to let us know your thoughts.

Let us notify you when we have news to share! Sign up to CMHC’s newsletter.

Was this page relevant to your needs?

Thank you for your feedback!

How Can We Help?

Suggest an Improvement

Report a Bug

How Can We Help?

Suggest an Improvement

Please share your suggestion.

Google Captcha Loader

How Can We Help?

Report a Bug

Please describe the problem.

Google Captcha Loader

Thank you. Your feedback has been submitted.

Discover related content using the tags below:

  • Housing Market
  • Research
  • Financing
Date Published: October 8, 2020

By Topic

  • Professionals
    • Project funding and mortgage financing
    • Housing markets data and research
    • Industry innovation and leadership
    • Events and speakers
  • Consumers
    • Home buying
    • Owning a home
    • Renting a home

About Us

  • CMHC's Story
  • Management and Governance
  • Our Partners
  • Corporate Reporting
  • Contact Us
  • Careers

More

  • CMHC Newsletters
  • CMHC Library
  • Housing Observer
  • Media Newsroom
  • CMHC and Accessible Housing
  • CMHC on Twitter
  • CMHC on LinkedIn
  • CMHC on Facebook
  • CMHC on Instagram
  • CMHC on YouTube
Privacy Policy    |    Terms and Conditions    |    Transparency    |    Accessibility Plan    |    Accessibility Feedback     Canada Mortgage and Housing Corporation (CMHC) ©2025 
Canada
loader icon