After six months in COVID quarantine Canada Mortgage and Housing Corporation is, once again, releasing its quarterly Housing Market Assessments.
The most recent HMA covers up to the end of June so the very busy period through July and August does not figure into the report.
Overall, the federal housing agency ranks the vulnerabilities to Canada’s housing market as moderate, the same as its last report in February. Overvaluation continues to show moderate risk while the other three factors – overheating, price acceleration and overbuilding – are ranked as low risk. No individual markets remain in the high risk category.
CMHC cites “the evidence of rising imbalances in some local housing markets coupled with the general weakening of housing market fundamentals” as the reason for maintaining the moderate risk ranking. The agency is also maintaining its forecast for a 9% to 18% decline in home prices from pre-pandemic levels.
“When I say I stand by our forecasts, it’s really with respect to what are the broad trends we expect moving forward,” says CMHC Chief Economist Bob Dugan. “When I look at the housing market there are a tremendous number of risks.”
The latest Canada Housing Market Assessment by Moody’s Analytics sides with CMHC. It calls for an average, national price drop of about 7% next year.
Moody’s points to weakening market fundamentals such as rising unemployment, reduced earnings and diminished affordability.