Covering Q2 2016, the CMHC study took into account sales-to-new-listings ratios (overheating), price acceleration, overvaluation, and overbuilding.
The CMHC found “strong evidence” of overvaluation in Canada’s two most active markets, although on the whole, Vancouver remained in the “moderate evidence” zone as of the second quarter of the year.
Meanwhile, Toronto and three other markets exhibited “strong evidence” of problems on an overall basis. Toronto’s condition is primarily fuelled by “strong evidence” of overvaluation. “Moderate evidence” of price acceleration and “weak evidence” of overheating also persisted in the city.
“While we do not detect overbuilding [in Toronto], we have some concerns about the high inventory of completed and unsold condominium apartments,” the CMHC report stated, as quoted by The Globe and Mail
On Calgary: “Strong evidence of problematic conditions, due to a combination of moderate evidence of overvaluation and overbuilding. A deterioration of economic fundamentals have contributed to moderate evidence of overvaluation.”
On Saskatoon: According to the CMHC, “strong evidence” of overbuilding is present in the city, along with “weak evidence” of overheating and price acceleration.
On Regina: “Strong evidence” of overbuilding and “moderate evidence” of overvaluation is driving most of the city’s housing problems. “Weak evidence” of overheating and price acceleration was also detected.
In its quarterly survey of the country’s housing sector, the Canada Mortgage and Housing Corp. (CMHC) reported that strong evidence of problematic conditions has emerged in four major housing markets.