A new analysis of the stability of the housing market in Metro Vancouver has found that there is currently “low evidence” of overbuilding and overheating.
According to today’s release of the 2019 second quarter Housing Market Assessment by Canada Mortgage and Housing Corporation (CMHC), new home inventories remain low, despite record-breaking new home construction over the past three years.
“After hovering around 400 units for the past two years, inventories for multi-family dwellings increased to 1,129 units in February 2019 as the softening resale market impacted sales of new units as well,” reads the report.
“In the single-detached segment, unsold inventory levels have trended up slightly over the past year to sit at 1,080 homes at the end of February 2019. Overall, the completed and unsold stock is low relative to the local population in the Vancouver census metropolitan area, while the purpose-built rental apartment vacancy rate remains well below the threshold for the detection of overbuilding.”
Moreover, CMHC says the overall sales-to-new-listings ratio was below the 75% threshold that defines overheating, with the market significantly slowing down over the past four quarter, resulting in “balanced or buyers’ market conditions” — especially for apartments and townhouses.
“Resale market conditions softened throughout 2018 and into 2019 as home buyers adjusted their expectations in light of evolving financing conditions and housing policies from all levels of government; moreover, the moderation of market conditions has been broad-based and extends across all price ranges,” states the report.
“While lower-priced segments continue to see firmer market conditions, a much greater availability of homes is observed at all price points compared with the first half of 2018.”
CMHC also found “moderate evidence” for overvaluation, as imbalances in price levels have narrowed compared to previous quarters.