HOUSING MARKET RISK ELEVATED BY CMHC

Canada’s federal housing agency says it is seeing more evidence of risk in real estate markets – with home prices climbing faster than income and population growth.

The national housing market risk has been dialed up to “strong,” from the “moderate” rating – that Canada Mortgage and Housing Corporation assessed the market at in July.

And continued overvaluation is the culprit – which means home prices aren’t fully supported by economic fundamentals such as income, mortgage rates and population growth.

The agency also finds evidence of price acceleration – which happens when prices go up at a faster pace – and show a possible sign of speculation – as properties are bought and sold purely for profit.

CMHC also predicts that the pace of new housing starts will decline next year – before stabilizing in 2018.

CEO Evan Siddall said earlier this month that the housing agency would push its risk rating to “strong” for the first time ever – when it releases its quarterly housing market assessment.

Michael Kramer

About Michael Kramer

Michael is the afternoon news anchor on the New Classical 96.3FM and hosts the program Zero to 1800.