For the past three years, Vancouver has been highly exposed to housing-related risks — not anymore.
And three other large markets currently displaying high levels of vulnerability may be joining BC’s biggest urban centre soon.
These are takeaways from the Canada Mortgage and Housing Corporation’s latest Housing Market Assessment, a study the national housing agency undertakes each quarter.
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The overall assessment is based on four indicators: price acceleration as well as signs of overheating, overvaluation and overbuilding.
It was easing home prices that tipped the scales for Vancouver’s market.
In the May assessment, CMHC still flagged moderate vulnerabilities related to price acceleration, but this time around the degree of vulnerability was downgraded to low.
In June, the benchmark price of a Greater Vancouver home, including houses and condo apartments, was $998,700, down 9.6 percent versus a year ago and 0.8 percent from May, according to the Real Estate Board of Greater Vancouver.
The benchmark price hasn’t touched sub-one-million-dollar territory since May 2017, the Financial Post reports.
The market still has moderate overvaluation risks, but there weren’t significant signs of overheating or overbuilding.
Late last month, Vancouver realtor Steve Saretsky drew attention to the record number of homes under construction across Greater Vancouver, and he says CMHC’s evaluation of low overbuilding vulnerabilities is “certainly up for debate.”
“Over the next two or three years there’s a lot of supply that’s in the pipeline,” he tells Livabl, noting the more than 44,000 units being built in the region as of June.
However, he notes that developers have begun shelving projects in the slow-sales environment. MLA Advisory, the research branch of real estate marketing firm MLA Canada, estimates 17 concrete condo projects encompassing 5,000 units have been delayed this year from launching sales throughout the Lower Mainland.
Saretsky suggests high supply levels could improve affordability, and speculates that might be a positive development in CMHC’s eyes. “I think that’s going to put some pressure on prices,” he adds.
CMHC suggests nearby Victoria, as well as Toronto and its environ Hamilton might soon have a reduced risk rating.
“Toronto, Hamilton and Victoria maintain a high degree of overall vulnerability. However, conditions of overheating, price acceleration and overvaluation are showing signs of easing in all three centres,” CMHC writes.
Despite having moderate risk evaluations in terms of overheating, price acceleration and overvaluation, the three markets are all in the green for overbuilding, suggesting low vulnerabilities related to the pace of residential construction.
Regina was highly vulnerable to overbuilding, making it the only of 15 metro areas to receive such an evaluation for a specific category.
“Edmonton, Calgary, Saskatoon, Regina and Winnipeg continue to see a moderate degree of vulnerability in the overall assessment, due to overbuilding,” says CMHC.