Canada: CMHC study - where is the housing supply?

In a new study titled Examining Escalating House Prices in Large Canadian Metropolitan Centres, the Canada Mortgage and Housing Corporation (CMHC) found that population growth and a strong economy helped house prices grow in Canada between 2010-2016.

However, the supply response to rising prices in Toronto and Vancouver, “has been significantly weaker than in other Canadian metropolitan areas”, said CMHCs CEO Evan Siddall.

This trend may have reached its end; according to the Toronto Real- Estate Board, home prices in Toronto were 4.1% lower in January 2018 year-on-year.

This 4.1% reduction was driven by a 9.1% decrease in detached homes, which was partially offset by a 14.6% increase in condo prices.

According to Toronto realtor Scott Ingram, “it isn’t as bad as it could’ve been”, and “it’ll be (a) mixed bag for the foreseeable future.”

With the stricter stress testing implemented by the OSFI and rising interest rates, 2018 may prove a turbulent time for Canada’s housing market.

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