Housing Market Assessment — Canada and Metropolitan Areas

PDF - Report

CMHC contributes to market stability by providing information on potential housing market vulnerability.

The Housing Market Assessment provides evidence of housing market imbalances across Canada. This, in turn, helps market participants to make better-informed housing-related decisions.

This report provides economic and housing market conditions for Canada and 14 Census Metropolitan Areas for the second quarter of 2021.

Highlights from the September 2021 release:

The Canadian housing market has moved from a moderate to a high degree of vulnerability. The change was prompted by the detection of price acceleration alongside persistent overvaluation imbalances.
High vulnerability at the national level is largely a reflection of intensified and persistent imbalances in several local housing markets across Ontario and Eastern Canada.
Montréal's housing market has moved to a high degree of vulnerability due to the detection of overvaluation imbalances. In Vancouver, it has moved to a low degree of vulnerability and in Toronto, it remained at a high degree.

Author:: CMHC
Document Type:: PDF
Date Published:: September 28, 2021

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About the Housing Market Assessment

The Housing Market Assessment (HMA) identifies significant imbalances in the housing market that could increase the risk and consequences of a housing market downturn.

Such scenarios, particularly a price correction, can have significant negative impacts on:

households
the housing industry
and the economy more broadly

The HMA results help key stakeholders and policy makers make appropriate decisions to generate a smooth transition towards more balanced market conditions.

The HMA framework looks at the state of the housing market vulnerability, by assessing potential imbalances using 4 key factors:

Overheating: when demand significantly outpaces supply
Price acceleration: when house prices rise at an increasing pace over a sustained period
Overvaluation: when house prices differ significantly from their level consistent with housing market fundamentals (such as labour income, population and interest rates)
Excess inventories: when there is an unusually high level of vacant housing units

The Housing Market Assessment isn’t intended to assess affordability.

Affordability relates to the cost of housing that meets the needs of a household at a reasonable share of their income. This aspect of housing is not covered in the Housing Market Assessment.

Even in a balanced housing market with a low level of market vulnerability, households in lower income brackets may still have difficulty finding shelter that is affordable and meets their needs.

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