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Vancouver at low risk of housing correction: CMHC

Last Updated Aug 13, 2015 at 12:09 pm PDT

(iStock Photo)

CMHC says the city has the fundamentals to support the price level

Risk level is based on overheated demand across the City of Vancouver

VANCOUVER (NEWS 1130) – The federal housing agency names Toronto, Regina and Winnipeg as likeliest to see a housing market correction, but not Vancouver.

Canada Mortgage and Housing Corporation says Vancouver is at low risk because the city has fundamentals that support the price level. It says that although the average Metro Vancouver home price is higher than the national average and that there is no overvaluation is detected.

“First-time home buyers focus on lower-priced options in suburban locales, whereas at the high end of the price spectrum, demand is supported by high net-worth residents or repeat buyers with significant equity in their homes,” says Bob Dugan, CMHC’s chief economist.

CMHC adds some centres, including Vancouver and Toronto, have “historically supported” higher prices due to factors such as “attracting a large number of migrants and/or because of relative land scarcity.”

Its risk level is based on overheated demand, accelerating price growth, overvaluation and overbuilding.