TORONTO — Canada’s federal housing agency says evidence of overvaluation has moderated in the country’s real estate markets, but the agency is still maintaining a “strong” overall risk rating.
Canada Mortgage and Housing Corp. says evidence of overvaluation at the national level has been downgraded to moderate, from strong.
CMHC says overvaluation — which occurs when house prices are not fully supported by economic fundamentals such as incomes — is now present in only six of the 15 markets included in the report, rather than eight.
The agency first raised its overall risk rating for the national housing market to strong from moderate last October, citing growing evidence of overvaluation.
CMHC’s housing market assessment is intended to be an early warning system to alert Canadians about problematic conditions developing in the country’s real estate markets.