Metro Vancouver's risk of overheated housing market downgraded: CMHC

Condo buildings in Vancouver. (Shutterstock)

Changing dynamics in Metro Vancouver’s housing market have prompted Canada Mortgage and Housing Corporation (CMHC) to lower its assessment of the market’s vulnerability to overheating.

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A new market report released today indicates the market is now “moderately vulnerable” — down from “highly vulnerably,” beginning in the third quarter of 2016.

“There was weak evidence of overheating in the Vancouver CMA housing market in the most recent quarter,” reads a CMHC report. “Slowing sales and a rising number of homes for sale have resulted in softened market conditions.”

Analysts furthered that there is also low evidence of overvaluation and overbuilding, with market inventories seeing significant increases for multi-family homes.

In the single-detached home segment, unsold inventory levels have been “relatively stable,” and the overall completed and unsold stock is low, relative to the region’s population.

“Over the past two years, differences in market conditions between property types and locations have been primarily determined by price point, with lower priced properties, particularly multi-unit options, seeing tighter market conditions,” added the report.

“However, 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 in market conditions has been broad-based and extends across all price ranges.”

Metro Vancouver housing market, Q2 2019. (CMHC)

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