CMHC declares Hamilton as overvalued as Toronto
The Canadian housing market seems to be on a collision course with disaster and nobody is quite sure on how we’re going to stop it. With Canada Mortgage and Housing Corporation’s latest quarterly housing market assessment showing a national trend toward problematic housing conditions, it seems like there really is nowhere we could be heading but a correction.
The CMHC assessment added Hamilton to the list of cities with strong evidence of overvaluation, saying that it was similar to that of Toronto’s market. Toronto Star reports that Abdul Kargobo, CMHC analyst said that even though there’s no specific data that shows Torontonians migrating to the smaller city for cheaper housing, it has definitely been a factor in Hamilton’s sudden price jump.
For Torontonians that price jump is relatively small. While the average home price in Hamilton has increased, reaching $451,000, it still pales in comparison to Toronto’s average of $940,000. The major problem in the city is that amount of sales is outnumbering the amount of new listings hitting the market. The ratio for sales to new listings was 84% last quarter, the highest its ever been. The threshold for overheating is considered 75%.
While some head west, others head east to the Durham region where houses can also be had for about half of what you find in Toronto. The situation in Toronto may begin spilling out into surrounding markets. CMHC has termed the city’s housing market as showing strong signs of problematic conditions. This quarter also saw Vancouver earn that assessment after previously being termed “moderate”.
Nationally, CMHC upgraded its assessment from “weak” to “moderate”, showing that overall the housing market is moving toward troubling times.