Kamis, 25 Maret 2021

Canada’s housing market: CMHC says Toronto moved to high vulnerability - Yahoo Canada Finance

The Canada Housing Mortgage Corporation (CMHC) logo is pictured in Toronto, Ontario, Canada, July 17, 2018. Picture taken July 17, 2018. REUTERS/Carlo Allegri

The Canada Mortgage and Housing Corporation says a number of Canadian housing markets are vulnerable (Reuters)

Despite soaring prices in many parts of the country, Canada Mortgage and Housing Corporation (CMHC) is maintaining its rating of a moderate degree of overall vulnerability.

But it does see signs of the housing market overheating at the national level.

“The impacts of the ongoing pandemic continued to influence Canada’s housing markets in the fourth quarter of 2020,” said CMHC chief economist Bob Dugan.

“Strong housing market activity and price appreciation contributed to the emergence of new imbalances in some markets, or contributed to the worsening of existing imbalances in already vulnerable markets.”

The Greater Toronto Area’s (GTA) overall vulnerability rating is being moved from moderate to high, because of signs of excess inventory tied to higher rental unit vacancies in the first quarter. Despite Toronto’s downgrade, CMCH isn’t saying that market is overheated.

“In Q4 2020, evidence of overheating in the Greater Toronto Area (GTA) housing market remained low as the sales-to-new listings ratio (SNLR) was 64.1 per cent, below the critical threshold set to signal overheating,” said CMHC senior specialist Dana Senagama.

“Despite more stringent lockdowns, housing market activity remained strong, fuelled by pent-up demand from earlier in the year, higher household savings, and low borrowing rates.”

Even though detached home prices are up around 30 per cent in some areas, CMCH says it doesn’t see overvaluation either.

“The pandemic resulted in job losses in lower-paying services-producing industries, while other higher-paying industries were left relatively intact,” said Senagama.

“Therefore, while observed real house prices increased relative to the previous quarter, their level was below that of prices supported by economic and demographic fundamentals such as income and population growth.”

Ottawa and Halifax also moved from moderate to high overall vulnerability. CMHC says it now sees moderate overvaluation in the nation’s capital.

Hamilton and Moncton remain highly vulnerable since those markets haven’t cooled. Edmonton and Calgary went from low to moderate.

Montreal and Vancouver’s overall vulnerability remains moderate.

Jessy Bains is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jessysbains.

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2021-03-25 16:39:27Z
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