7 February 2019

CMHC changed Toronto and Victoria’s overvaluation rating from high to moderate when comparing it to population growth, personal disposable income and interest rates.

At the same time, the degree of overall vulnerability is still high in Hamilton and Vancouver, where the housing market has cooled recently, but home prices are still too high in relation to economic fundamentals.

However, CMHC believes the overall vulnerability rating may go down in the next quarters due to the fact that overheating and overbuilding are quite low in certain markets.

“There are signs of weaker overvaluation pressure in Toronto, as house price growth is moderating, while the fundamentals keep showing a strong growth pace. As a result, the gap between them is decreasing,” – CMHC chief economist Bob Dugan noted.