Emma Crawford Hampel
The Vancouver Sun
A Vancouver home for sale. A new CMHC report said evidence the housing market in the city is overvalued has increased since January. Photo: Rob Kruyt
As Vancouver’s housing market continues to heat up, the Canada Mortgage and Housing Corporation (CMHC) announced April 27 the city is now showing strong evidence of overvaluation.
In the CMHC’s previous assessment, released in January, the organization had found moderate evidence of overvaluation.
“Single detached home prices are higher than levels supported by economic fundamentals, and inventories of new and resale homes are declining while demand remains high,” said Robyn Adamache, the CMHC’s principal market analyst for Vancouver.
“We’re also keeping an eye on overheating and price acceleration, which are slowly advancing, but evidence of these conditions remains weak.”
In compiling its overall assessment of whether a city is showing evidence of problematic conditions, the CMHC considers overheating, price acceleration, overvaluation and overbuilding.
Despite the strong evidence of overvaluation, the CMHC said Vancouver’s housing market shows evidence of moderately, but not strongly, problematic conditions.
There is little evidence of overbuilding, overheating or price acceleration in the city, the CMHC said in its report, which has kept the overall assessment from crossing into strongly problematic.
The housing market in Vancouver has been soaring in 2016. In March alone, a total of 5,301 homes were sold in the city—up more than 28 per cent year-over-year—according to British Columbia Real Estate Association data released April 15. The benchmark price increased almost 23 per cent over that period, reaching $1,093,267.
Across the province, the number of homes sold soared 38% over the year. BCREA chief economist Cameron Muir said this increase is tied to strong employment growth, increasing wages and inter-provincial migration into the province.
According to a Central 1 report released April 19, there are no signs Vancouver’s market will cool anytime soon.
© 2016 Vancouver Courier
