More Canadian real estate markets are seeing increased levels of vulnerability. Canada Mortgage and Housing Corporation (CMHC) released the September edition of the Housing Market Assessment (HMA). The assessment shows almost half of Canada’s major real estate markets have moderate levels of risk now. Many markets are also benefiting from government pandemic supports. That means they may be worse off than they appear on paper.
CMHC Housing Market Assessment
The CMHC Housing Market Assessment (HMA) is a straight-forward market look, with a color coded summary. The colors are based on a fool-proof stop light-like system. High levels of vulnerability are marked red. Those with moderate levels of are yellow. Those with no obvious signs of vulnerability are marked green.
There are a few details to keep in mind regarding timelines and sub-ratings. The overall assessment includes the past six quarters of data, but the chart only shows two. That’s why sometimes you’ll see all green for sub-ratings, but a moderate overall assessment. A market that is no longer considered overvalued, can still see a correction to prior levels.
Speaking of overvaluation, this indicator is pretty much useless during the pandemic. Since the Q2 data uses disposable income, which surged during the pandemic, it’s higher than usual. This is due to government supports, which unpredictably, boosted that number. Since this is temporary, the agency notes overvaluations are “likely underestimated.”
Almost Half of Canadian Real Estate Markets Are Moderately Vulnerable
Canadian real estate has a moderate level of vulnerability. There are now 7 major markets displaying a moderate level of vulnerability. This is up from 5 during the February report. New markets to join these ranks are Moncton, Halifax, and Ottawa. The only market to see the rating lower back to a “low” degree of vulnerability is Regina.
Source: CMHC.
Toronto Real Estate Vulnerability Is “Moderate”
Toronto real estate is a low level of risk for all indicators, except the overall assessment. That may seem somewhat contrary to the Spring price forecast from the CMHC, showing falling prices. However, the report notes the gap between fundamentals continued to worsen. It just failed to hit the threshold line for overvaluation, due to the rise in disposable income.
Vancouver Real Estate Vulnerability Is “Moderate”
Vancouver real estate shows few signs of vulnerability, but is overall “moderate.” The report notes a widening gap between fundamentals and observed prices. They also mention government supports made the gap smaller than it would have been without them. As these supports fade, the gap between prices and fundamentals should widen further.
Montreal Real Estate Vulnerability Is “Low”
Montreal real estate saw two indicators hit moderate, but overall was still “low.” Price acceleration and overheating both reached moderate levels of vulnerability. Overvaluation approached the threshold due to a larger gap between prices and fundamentals, but didn’t breach it. The report notes this gap would be wider without government supports.
The September HMA is a little wonky, and the insights are hidden. The takeaway is less about the indicators, and more about what prevented deterioration. Like the debt-to-income ratio’s sharp decline, the positive note is somewhat deceptive. Until government supports are removed, it’s not entirely clear where the market sits. However, from today’s notes, it’s likely to get worse before it gets better.
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HALIFAX – A village of tiny homes is set to open next month in a Halifax suburb, the latest project by the provincial government to address homelessness.
Located in Lower Sackville, N.S., the tiny home community will house up to 34 people when the first 26 units open Nov. 4.
Another 35 people are scheduled to move in when construction on another 29 units should be complete in December, under a partnership between the province, the Halifax Regional Municipality, United Way Halifax, The Shaw Group and Dexter Construction.
The province invested $9.4 million to build the village and will contribute $935,000 annually for operating costs.
Residents have been chosen from a list of people experiencing homelessness maintained by the Affordable Housing Association of Nova Scotia.
They will pay rent that is tied to their income for a unit that is fully furnished with a private bathroom, shower and a kitchen equipped with a cooktop, small fridge and microwave.
The Atlantic Community Shelters Society will also provide support to residents, ranging from counselling and mental health supports to employment and educational services.
This report by The Canadian Press was first published Oct. 24, 2024.
Housing affordability is a key issue in the provincial election campaign in British Columbia, particularly in major centres.
Here are some statistics about housing in B.C. from the Canada Mortgage and Housing Corporation’s 2024 Rental Market Report, issued in January, and the B.C. Real Estate Association’s August 2024 report.
Average residential home price in B.C.: $938,500
Average price in greater Vancouver (2024 year to date): $1,304,438
Average price in greater Victoria (2024 year to date): $979,103
Average price in the Okanagan (2024 year to date): $748,015
Average two-bedroom purpose-built rental in Vancouver: $2,181
Average two-bedroom purpose-built rental in Victoria: $1,839
Average two-bedroom purpose-built rental in Canada: $1,359
Rental vacancy rate in Vancouver: 0.9 per cent
How much more do new renters in Vancouver pay compared with renters who have occupied their home for at least a year: 27 per cent
This report by The Canadian Press was first published Oct. 17, 2024.
VANCOUVER – Voters along the south coast of British Columbia who have not cast their ballots yet will have to contend with heavy rain and high winds from an incoming atmospheric river weather system on election day.
Environment Canada says the weather system will bring prolonged heavy rain to Metro Vancouver, the Sunshine Coast, Fraser Valley, Howe Sound, Whistler and Vancouver Island starting Friday.
The agency says strong winds with gusts up to 80 kilometres an hour will also develop on Saturday — the day thousands are expected to go to the polls across B.C. — in parts of Vancouver Island and Metro Vancouver.
Wednesday was the last day for advance voting, which started on Oct. 10.
More than 180,000 voters cast their votes Wednesday — the most ever on an advance voting day in B.C., beating the record set just days earlier on Oct. 10 of more than 170,000 votes.
Environment Canada says voters in the area of the atmospheric river can expect around 70 millimetres of precipitation generally and up to 100 millimetres along the coastal mountains, while parts of Vancouver Island could see as much as 200 millimetres of rainfall for the weekend.
An atmospheric river system in November 2021 created severe flooding and landslides that at one point severed most rail links between Vancouver’s port and the rest of Canada while inundating communities in the Fraser Valley and B.C. Interior.
This report by The Canadian Press was first published Oct. 17, 2024.
