Canada Mortgage and Housing Corp. (CMHC) has lowered its risk for the national housing market to "moderate" from "high." It’s the first downgrade by the federal agency in two years.
In its quarterly report on housing, CMHC said the overall level of vulnerability in Canada’s housing market has inched down from high to moderate over the past six months. The housing agency assesses risk based on four factors: overheating, price acceleration, overvaluation and
overbuilding.
CMHC assesses these factors and gives each housing market across the country a colour-coded grade for how worried it is. Green means there's little evidence of a problem, yellow means there's some reason for concern, and red would indicate a high risk.
Nationally, the CMHC now gives Canada’s housing market a yellow. The agency said there's little evidence of widespread overheating, price acceleration or overbuilding. But there's enough overvaluation to warrant a yellow flag.
However, while the national picture is looking more positive, CMHC said there are still regional pockets of major worry, including Vancouver, Toronto and Hamilton, Ontario. The agency also noted that there is considerable overbuilding in Regina right now.
But overall, CMHC said Canada’s real estate market is looking better today mainly because average prices are trending downward even as income and population levels continue to rise.
