Market Commentary

THINK OUTSIDE THE BOX:  In a surprising report Canada Mortgage and Housing Corporation says it sees only two high risk real estate markets in Canada and neither one of them is Calgary.

Despite all of the attention focused on Calgary because of the plunge in oil prices CMHC points to Regina and Winnipeg as the riskiest markets in the country.

In Regina the agency cites price acceleration, overvaluation and overbuilding (particularly condos). In Winnipeg, overvaluation and overbuilding are the culprits. Local realtors tend to disagree with CMHC’s assessment.

Prominent economist Benjamin Tal points out the risk is based on “price relative to the potential purchasing power of potential buyers.” He says the assessment does not mean anyone is suggesting any sort of crash is in the works.

Calgary gets a low risk rating as does Vancouver – the most expensive market in the country. Toronto is deemed a moderate risk along with Montreal. On the whole, CMHC ranks Canada’s housing market as modestly overvalued.

First National Financial LP         May 4, 2015

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