New | Soaring housing prices put Toronto market on crash course
Canadian housing agency expresses concern over long surge in costs in country's largest city but sees no overheating in overall market
While Canada's overall housing market is at low risk of overheating, its largest city, Toronto, is at high risk of overvaluation, the federal housing agency said in a report that highlights the nation's uneven real estate market.
Amid concerns that bubbles are growing in several cities, the Canada Mortgage and Housing Corp said Toronto, Winnipeg and Regina showed high risk of overvaluation, price acceleration or overbuilding.
It also said Vancouver showed no signs of problematic housing conditions. That finding was at odds with frequent complaints about its high home prices from residents who say ordinary Canadians have been priced out of the market entirely.
"Our overall assessment of the risk of problematic conditions varies from centre to centre due to regional differences in housing markets," chief economist Bob Dugan said in the report.
"Imbalances in local housing markets could be resolved with further moderation in house prices or improving economic conditions."
Prices, sales and new housing starts have suggested a correction is under way in some markets, notably in Calgary, Alberta. Alberta is a major oil producer and has been hit hard by dropping crude prices.
But real estate is roaring ahead elsewhere, including Toronto, where prices have risen 58 per cent in six years, and some analysts believe the market is at risk of a US-style crash.