Three months after issuing a dire warning on the state of Canada's housing market, Canada Mortgage and Housing Corporation said Thursday that strong evidence of "problematic" conditions nationally have continued for a second consecutive quarter.
The federal agency, in its latest quarterly market analysis, said that such conditions persisted due to overvaluation and price acceleration.
CMHC said such is what accounts for market conditions in Vancouver and Toronto, where strong price growth has spread to other areas.
The federal agency said house prices grew nationally by seven per cent year-over-year at the end of the third quarter of 2016 after adjusting for inflation. However, CMHC said, removing Ontario from the calculation would have seen prices remain flat through to the third quarter.
CMHC said overvaluation and overbuilding remain the most prevalent problematic conditions seen in its analysis, with those conditions detected in eight of the 15 cities covered.
Evidence of problematic conditions has increased in Victoria since its last assessment in October 2016 due to moderate evidence of price acceleration and overvaluation, CMHC said. Meanwhile, Calgary saw conditions ease as some housing markets in oil-dependent centres are now finding a balance.
Conditions in the other 13 markets included in the quarterly survey remained unchanged.
Last week, CMHC said it would charge borrowers a few dollars more every month to insure their mortgages, starting in mid-March.
