There is little evidence of overheating in the Vancouver census metropolitan area (CMA) as a whole, according to the Canada Mortgage and Housing Corporation, but some districts in the region are more overheated than others.
Overheating occurs when the demand for existing homes is significantly higher than the supply. Across the CMA, the sales-to-new listings ratio was 73%, which is slightly below the 75% threshold that would indicate overheating.
Some municipalities in the CMA are bucking the trend. Port Moody is the most overheated city in the region with a sales-to-new listings ratio of 87%. This is mostly being driven by apartment sales, with a ratio of 105%. Other overheated areas include Port Coquitlam (83%), Langley (86%) and Coquitlam and New Westminster (both 81%).
While the area as a whole is not overheated, homes in the CMA are definitely overvalued, the CMHC said.
“In other words, growth in fundamentals cannot fully explain the growth in home prices,” the association said in its report.
“Housing fundamentals have been strong for the Vancouver CMA; however, the overall numbers mask important details.”
The report comes just two days after RBC released the results of a study that found a housing crash in the area is unlikely in the near term because of strong employment growth. The CMHC agreed there has been higher-than-average employment growth, but tempered this by pointing out there has also been an increase in the share of part-time workers and a drop in average earnings.
As well, migration into the city has increased, which would seem like a driver of increased demand, but the CMHC argues this increase was driven by a jump in those aged 16-20 – not a group that is generally looking to buy homes.
@EmmaHampelBIV
