Canada’s national housing agency rang more alarm bells about Vancouver’s real estate sector after it released a report Wednesday saying there is now strong evidence of problematic conditions in the city.
“Right now we’re seeing moderate evidence of overheating and price acceleration in Vancouver because supply is not keeping pace with demand,” Robyn Adamache, a principal market analyst for Canada Mortgage and Housing Corp., said in a statement.
“We’re also continuing to see strong evidence of overvaluation mainly because single detached home prices are higher than those supported by economic fundamentals.”
CMHC’s quarterly assessment comes as the B.C. government plans to implement several measures, including a 15-per-cent tax for foreigners purchasing property, in an effort to cool down house prices that are among the highest in North America.
Earlier this month, the Real Estate Board of Greater Vancouver reported that the benchmark price for all residential properties in Metro Vancouver was $917,800 in June, a 32-per-cent jump from the same month last year.
CMHC’s report Wednesday also said that evidence of problematic conditions in Canada’s housing market as a whole has risen from weak to moderate, adding that there was strong evidence of such conditions in Toronto, Calgary, Saskatoon and Regina.
Real estate markets in Edmonton, Winnipeg, Hamilton, Montreal and Quebec have exhibited moderate evidence of imbalances, the report said.
The housing agency says imbalances occur when overbuilding, overvaluation, overheating and/or price acceleration depart significantly from historical averages.
Overall evidence of problematic conditions has decreased in Ottawa since the previous CMHC housing market assessment in April.
The assessment is intended to be an early warning system to alert Canadians about problematic conditions developing in the country’s real estate markets. It covers 15 regional markets and the national housing market as a whole.
