CMHC finds Metro housing moderately vulnerable to market change

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Since the period covered in the report, Batch said, buyers and sellers have returned to the market and he guessed that some of the sales seen during the more active months of July and August represent transactions that were delayed by the lockdown.

In May and June, CMHC issued a warning that the unemployment picture sparked by the pandemic lockdown and interruption in immigration would drag prices in Metro Vancouver down anywhere between eight and 16 per cent before recovering in 2022.

In the short term, however, Batch said analysts have not seen deep reductions in household income that would dent property markets, possibly because of pandemic income-support measures.

“The other thing with unemployment is, it’s really concentrated in certain sectors,” Batch said. “So it actually makes it harder and more complicated (to model).”

The CMHC report notes that since income supports are temporary, it is likely that a finding that housing is overvalued “is likely underestimated” at a national level.

“CMHC will continue to closely monitor housing markets as these programs are either withdrawn or transitioned to other programs,” the report reads.

CMHC’s considers four factors in assessing housing markets — the degree a market might be overheating, rising prices, how much properties are overvalued compared with fundamentals and whether developers are overbuilding new housing.

The CMHC calculated Metro Vancouver showed low, or little, evidence that markets were overheating, based on sales-to-available-listings ratios ranging from a low of eight per cent on detached homes to a high of 22 per cent in Langley.

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