Alarm bells may be going off across the water in Vancouver, but the Victoria housing market remains relatively stable, according to the country’s national housing agency.
The Victoria market shows little evidence of problematic conditions, said the Canada Mortgage and Housing Corp.’s quarterly Housing Market Assessment released Wednesday.
The report, which covers the second quarter of 2016, noted there was “moderate evidence of overheating as demand significantly outpaced the supply of housing in the first quarter of 2016 and this trend continued into the second quarter, pushing the sales-to-new-listings ratio of existing homes above the threshold.”
The report noted in 2015, the balance between housing supply and demand shifted in favour of sellers resulting in price growth, which has continued until now. It also noted new listings have remained relatively unchanged in the region compared to the same time last year while sales went up by over 40 per cent for all types of homes. As a result, average prices were up by 12 per cent compared to last year.
CMHC noted other factors it takes into account in its analysis — price acceleration, overvaluation and overbuilding — all showed weak evidence of problematic conditions.
It was a very different story in Vancouver, where CMHC reported there is strong evidence of problem conditions.
“Right now we’re seeing moderate evidence of overheating and price acceleration in Vancouver because supply is not keeping pace with demand,” said Robyn Adamache, a principal market analyst for CMHC. “We’re also continuing to see strong evidence of overvaluation mainly because single detached home prices are higher than those supported by economic fundamentals.”
CMHC’s quarterly assessment comes as the B.C. government plans to implement several measures, including a 15 per cent tax for foreigners purchasing property, in an effort to cool down house prices that are among the highest in North America.
This month, the Real Estate Board of Greater Vancouver reported the benchmark price for all residential properties in Metro Vancouver was $917,800 in June, a 32 per cent jump from the same month last year.
CMHC’s report Wednesday also said that evidence of problematic conditions in Canada’s housing market as a whole has risen from weak to moderate. It said there was strong evidence of such conditions in Toronto, Calgary, Saskatoon and Regina.
Real estate markets in Edmonton, Winnipeg, Hamilton, Montreal and Quebec have exhibited moderate evidence of imbalances, the report said.
The housing agency said imbalances occur when overbuilding, overvaluation, overheating and/or price acceleration depart significantly from historical averages.
The assessment is intended to be an early warning system to alert Canadians about problematic conditions developing in the country’s real estate markets. It covers 15 regional markets and the national housing market as a whole.
