Canada Mortgage and Housing Corp. says the jump in home prices seen in many cities this summer and fall was beyond what could be justified by Canadian income levels and population growth.
The comment was part of the CMHC’s Housing Market Assessment, which concluded that Canada’s residential real estate market is as vulnerable to a housing bubble as it was earlier this year.
The report categorizes 15 Canadian cities as having low, moderate, or high vulnerability based on whether the local real estate market is seeing overheating, rapidly rising prices, overvaluation, or overbuilding.
Overall, CMHC says the Canadian housing market is moderately vulnerable, but now has more high-risk cities and fewer low-risk cities.
CMHC says Hamilton, Ont. and Moncton have become highly vulnerable amid price acceleration and overvaluation of homes in the second half of this year.
Overvaluation of homes has also increased in Toronto, Montreal and Regina, although all three cities are only considered moderately vulnerable to the type of conditions seen in the late 1980s and early 1990s Toronto housing bubble.
This report by The Canadian Press was first published Dec. 16, 2020