This country's national housing agency postulates that out housing markets are highly vulnerable and at risk of being hit by overbuilding, overvaluation and too-quick price appreciation.
The Canada Mortgage and Housing Corporation singled out housing markets in Toronto, Hamilton, Vancouver, Victoria and Saskatoon for being "highly vulnerable" for a combination of factors.
Four times a year, the national housing agency looks at housing in the 15 largest markets in the country, and judges them on four criteria:
Overheating: Sales significantly outpace new listings.
Price acceleration: Fast-rising prices are often a sign of speculative activity.
Overvaluation: Prices are higher than incomes, mortgage rates and other fundamentals can justify.
Overbuilding: The rental market vacancy rate or the level of unsold new buildings is higher than normal.
In each criteria, the CMHC gives the market a colour-coded grade: green means there's little evidence of that problem, yellow is for when there's moderate evidence, and red means strong evidence of that category.
The five cities above received red warnings overall, and are collectively large enough that the national housing market also got a red flag.
CMHC says other cities, including Calgary, Edmonton, Regina and St. John's, are also showing evidence of overbuilding