House prices overvalued in 11 of Canada's 15 biggest cities, CMHC says

B00Mer

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Sep 6, 2008
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House prices overvalued in 11 of Canada's 15 biggest cities, CMHC says



Canada's national housing agency is warning of "problematic housing market conditions" in most of the country's major housing markets.

The Canada Mortgage and Housing Corporation said in its Housing Market Assessment report on Thursday that many housing markets are showing troubling signs in four criteria:

  • Overheated home sales.
  • Too many homes being built.
  • Prices increasing too quickly.
  • High prices.

When all four factors are taken together, the agency singled out four cities for being particularly troubling: Saskatoon, Regina, Winnipeg and Toronto.

"In Toronto, strong evidence of problematic conditions reflects a combination of price acceleration and overvaluation," the CMHC said. "Strong evidence of problematic conditions in Winnipeg, Saskatoon, and Regina reflects detection of overvaluation and overbuilding."

Overvaluation concerns

While those four cities gave the housing agency the most concern overall, overvaluation was called widespread.

It was cited as either a "moderate" or a "strong" problem in 11 of the 15 cities the CMHC includes in its assessment.

The cities include:

  • Vancouver.
  • Victoria.
  • Calgary.
  • Edmonton.
  • Regina.
  • Saskatoon.
  • Winnipeg.
  • Toronto.
  • Hamilton.
  • Ottawa.
  • Montreal.
  • Quebec.
  • Moncton.
  • St. John's.
  • Halifax.

"The most prevalent issue detected in 11 of the 15 centres covered by the HMA is overvaluation," CMHC's chief economist Bob Dugan said. "The evidence of overvaluation has increased since the previous assessment in Toronto, Vancouver, Montreal, Edmonton and Saskatoon as price levels are not fully supported by economic and demographic factors."

The four cities where the CMHC said overvaluation isn't a problem are Victoria, Hamilton, Moncton and St. John's.



Earlier this month, the Canadian Real Estate Association reported that the average Canadian home sold in September went for $433,649, a figure that has risen by six per cent in the previous 12 months.

But the Realtor group said most of the gains in the national figure are coming from Toronto and Vancouver. Outside of those two cities, house prices have appreciated by less than three per cent in the past year, the association said.

The CMHC's report Thursday suggests the problem may be more widespread than possible local bubbles in those two cities.

source:: House prices overvalued in 11 of Canada's 15 biggest cities, CMHC says - Business - CBC News
 

taxslave

Hall of Fame Member
Nov 25, 2008
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AS far as I am concerned most houses are grossly overpriced. However the market sets the price. If fools want to pay double what their shack is worth, let them. That is between them and their banker.
 

Cannuck

Time Out
Feb 2, 2006
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It's interesting that, of the four cities "singled out" one was Toronto and neither was Calgary or Edmonton.
 

IdRatherBeSkiing

Satelitte Radio Addict
May 28, 2007
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Yet these people who knowingly buy a house worth 3 times its value, and when the value eventually collapses, they will be whining for the government to bail them out.
 

Frankiedoodle

Electoral Member
Aug 21, 2015
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Amazing that Saskatoon or Regina is mentioned in any National Survey. From the National News Stations reporting, I thought Canada went from Winnipeg then jumped over to Calgary.
 

AnnaG

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Jul 5, 2009
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Houses are overpriced around here, too. But that is because people from Vancouver and Calgary et al come here, build huge houses then only live here for a couple months of the year. Meanwhile, the folks that have lived here for decades, are having to pay higher taxes than they normally would have paid.
Transplants from cities are an odd bunch. Good for a laugh most of the time. They say, "We love the peace and quiet", but the next sentence is "we need a Canadian Tire here", or "we need a McDonald's here". lol Then they treat the roads around here as if they are still driving on freeways. And the ones that move here from Vancouver always seem to be shocked when winter arrives "suddenly and without warning". haha So of course they get it into their heads that maybe they should get snow tires. But the tire shops are usually full and it takes a while to get in for the tires.


Sorry for the side note but I thought transplants were worth mentioning. hehe
 
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