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CMHC says 'no housing bubble' forming in Canada

The CMHC's report, called House Price Analysis and Assessment, will reassure some of those who think that Canada's housing market is due for a major price correction.


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November 26, 2014 by Steve Payne

Even with the average resale price of a Canadian home up 6.9 per cent in the past year, compared to just 1.9 per cent inflation under the Consumer Price Index, there is “no housing bubble” forming in Canada that should lead to a major correction of prices, says the Canada Mortgage and Housing Corporation (CMHC) in publishing the results of its House Price Analysis and Assessment.

The report analyzes resale housing prices in Canada’s 8 largest metropolitan areas.

It says that, while there is no current “housing bubble,” there is still a “moderate” risk of future overbuilding in Toronto, Montreal and Quebec City if builders are not careful to match new housing starts with sales of their existing inventory. But the report says the risk of overbuilding is “low” in Vancouver, Edmonton, Calgary, Ottawa and Halifax.

In an excellent summary of the CHMC’s report, here in the National Post, Peter Norman, a well-known Canadian housing analyst (Altus Group), makes an intriguing statement. He says that housing investment in Canada is actually at an almost “historic” low.

How can this be, when so many cities have their skylines filled with cranes and when the condo boom is throwing up high-rises like weeds?

Easy, Norman says: A high-rise building has less than half the investment value per unit of traditional ground-based homes like detached homes, semis and townhouses. And as detailed elsewhere in the report, high-rises now represent well more than half of all new residential construction.


Steve Payne

Steve Payne

Steve Payne is the editor of Canadian Contractor magazine
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4 Comments » for CMHC says 'no housing bubble' forming in Canada
  1. Bob2 says:

    Asking CMHC about housing is like asking your barber if you need a trim, CMHC is responsible for the out of whack housing prices, it doesn’t take a mathematical genius ( I may be wrong on that) to figure out the correlation between income vs housing is distorted big time.

    Jobs are paying less every year, heck, in my trade (commercial HVAC) the pay is the same and even less than it was 10 years ago, even the union hasn’t kept up with basic 2-2.5 inflation, yet housing is through the roof since that time, everyone is trying to get rich by swapping houses, eventually the music will stop like it has before.

    A healthy RE market should be what we want not a distoterd one like we have,

    • Edward says:

      Totally agree BOB2

    • Steve Payne says:

      Bob2: Good point. And if I may digress, if you do ask your barber if you need a trim, don’t forget to ask him to produce his Ontario College of Trades credentials. Otherwise, he is in non-compliance and liable to a large fine. You could end up with an unsafe, not-up-to-code haircut. He might not even trim your eyebrows. I met with the head of the hairstylists’ association down at Queen’s Park a few months ago, at an anti-OCOT protest.

  2. terry says:

    I also totaly agree with Bob