Housing Market Assessment — Canada and Metropolitan Areas

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Description

The Housing Market Assessment (HMA) publication evaluates the housing market conditions for signs of imbalances in selected Census Metropolitan Areas that could lead to financial instability. It is not a forecasting tool or housing affordability assessment.

All assessments are now available in a single report. Use the menu at the beginning of the report to navigate to the region of your choice.

Highlights from the March 2021 release (4th Quarter 2020 results)

The impacts of the ongoing pandemic continued to influence housing market conditions in Canada in the fourth quarter of 2020. Market intelligence indicates a strong possibility of heightened vulnerabilities in select markets in our next assessment cycle.
Sales remained elevated relative to new listings in many regions. There is now evidence of overheating at the national level.
Sustained price growth contributed to the emergence or persistence of price acceleration and overvaluation imbalances in some markets. This is particularly the case in Eastern Canada.
Among the three largest metropolitan areas, the degree of overall vulnerability of the housing market in Toronto moved to high. In Montréal and Vancouver it remained moderate.
The short-term impacts of the pandemic led to an increase in the proportion of unoccupied rental apartments in many regions. The excess inventories in certain segments of the rental market can be a source of risk to short-term local market stability.

Excess inventories, previously named “overbuilding”, refers to an elevated number of newly built unsold homes or a high rental apartment vacancy rate. Such excess inventories can create financial difficulties for builders and rental companies if they struggle to repay debt used to build or buy these units.

Excess inventories are a risk even in unaffordable markets. In such markets, excess inventories should be cleared in the medium term but can present short-term risks. Centres with unaffordable housing would continue to benefit from long-term increases in housing supply. This would restrain growth in house prices and rents even if there are short-term periods of excess inventories.

For the full and regional results, download the latest report.

Geography: Edition:

Author:: CMHC
Document Type:: PDF
Date Published:: March 25, 2021
ID Number:: 68456

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About the Housing Market Assessment

The Housing Market Assessment provides timely, accurate, and reliable assessments of Canadian housing markets.

It is not a forecasting tool or housing affordability assessment.

The HMA is an analytical framework intended to detect evidence of current or emerging imbalances across Canada. The report is aimed at assessing whether there are risks from the overall housing market that could ultimately affect financial stability. It combines the results from a technical framework with insights gained through CMHC analysts’ knowledge of local market conditions. To obtain an accurate picture of the overall state of the housing market, multiple measures and indicators are analyzed. The HMA uses a comprehensive, multidimensional, and integrated framework to assess housing market conditions.

To capture imbalances in housing markets, the HMA framework assesses 4 factors:

overheating, when housing demand outpaces supply
price acceleration, when there is a sustain increase in the growth rate of house prices
overvaluation of house prices in comparison to levels that can be supported by housing market fundamentals
excess inventories (formerly “overbuilding”), when the inventory of available housing units is elevated

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