“The evidence of overbuilding has increased since the previous assessment in Calgary, Saskatoon, Regina, and Ottawa due to either higher vacancy rates, high inventory of new and unsold units, or a combination of both. As more centres are now showing problematic overbuilding conditions, inventory management is becoming more important,” said Bob Dugan, CMHC’s Chief Economist.
The report will increase calls for a correction in Toronto with the view that the region has overvaluation and price acceleration and the potential for overbuilding in the condo sector. Overvaluation in Winnipeg has been reduced from strong to moderate on evidence that economic and demographic improvements are taking place.
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The latest assessment of Canada’s housing market by the Canada Mortgage and Housing Corporation has sounded warnings of overvaluation and overbuilding in some areas. Of the 15 centres surveyed by the agency 8 showed signs of overvaluation and 7 had signs of overbuilding.