Despite having one of the highest real estate markets in the world, the Canada Mortgage and Housing Corporation (CMHC) has stated that the housing market in Metro Vancouver is at “low risk” for being overvalued.
The finding comes as part of the CMCH’s House Price Analysis and Assessment (HPAA) released November 24th. Using data collected from the Canada Real Estate Association, the CMCH calculated that prices in Metro Vancouver had grown by approximately 6% since January, when the average price for a detached home was $812,000.
Although the prices of real estate may seem sky high, the CMHC concluded that Vancouver’s real estate market is supported by income growth and long term population growth.
The HPAA had slightly different results for Toronto , stating there was a moderate risk of overvaluation due to the fact that income growth did not match market growth. Calgary, Edmonton, Ottawa, Montreal, Quebec City and Halifax were also examined and the report concluded that Montreal and Quebec were the only other regions at moderate risk of overvaluation, although this time it was due to a low average of first-time buyers.
While some analysts still think a market correction is inevitable, others believe prices will hold steady unless there’s some sort of economic shock, such as a notable spike in unemployment or a sharp hike to interest rates.