In news that will shock no one, Vancouver’s housing situation has once again been called “problematic” in a new national report.
Released by the Canada Mortgage and Housing Corp (CMHC), the report found the issue comes from a combined evidence of price acceleration and overvaluation.
Overall, the federal Crown corporation said the housing market in Canada is showing some signs of improvement, but said there is still “strong evidence of problematic conditions.”
Regionally, “Eastern markets show weak evidence of overvaluation while this factor is stronger in Western centres… where economic fundamentals have not kept pace with recent price growth,” said Bob Dugan, CMHC Chief Economist, in a statement.
However, the report added, there was an uneven “cooling” in the market as well: “Moderately priced properties sold quickly and often over the asking price compared with higher priced homes.”
At the same time, numerous new home construction projects began throughout 2016.
Now, the CMHC report says, “the count of completed and unsold homes remains low and the region’s relatively low rental market vacancy rate led the HMA framework to indicate weak evidence of overbuilding.”
The report looked at four main factors in determining the “problematic” designation:
- Overheating: a situation when the demand for existing homes greatly outpaces the
supply of existing homes for sale;
- Sustained acceleration in house prices
- Overvaluation of house prices in comparison to levels that can be supported by housing
- Overbuilding: which occurs when the rental market vacancy rate and/or the inventory of newly built housing units that are unsold