Canada’s national housing agency is warning of “problematic housing market conditions” in most of the country’s major housing markets.
The Canada Mortgage and Housing Corporation said in its Housing Market Assessment report on Thursday that many housing markets are showing troubling signs in four criteria:
- Overheated home sales.
- Too many homes being built.
- Prices increasing too quickly.
- High prices.
When all four factors are taken together, the agency singled out four cities for being particularly troubling: Saskatoon, Regina, Winnipeg and Toronto.
“In Toronto, strong evidence of problematic conditions reflects a combination of price acceleration and overvaluation,” the CMHC said. “Strong evidence of problematic conditions in Winnipeg, Saskatoon, and Regina reflects detection of overvaluation and overbuilding.”
“The most prevalent issue detected in 11 of the 15 centres covered by the HMA is overvaluation,” CMHC’s chief economist Bob Dugan said. “The evidence of overvaluation has increased since the previous assessment in Toronto, Vancouver, Montreal, Edmonton and Saskatoon as price levels are not fully supported by economic and demographic factors.”
The CMHC’s report Thursday suggests the problem may be more widespread than possible local bubbles in those two cities.