Overvalued homes continue to be a feature of Canada’s largest cities during the second quarter as the pandemic bit into the number of houses entering the market, according to the country’s largest public mortgage provider. And other Canadian cities are also seeing home prices heat up.
“There was sharp pullback in new listings and resulting low levels of inventory,” the Canadian Mortgage and Housing Corporation said in its second quarter housing market assessment report Monday. “This maintained some pressure on house prices in local housing markets that were seeing strong activity prior to the crisis.”
This triggered increased levels of overvaluations in Vancouver and Toronto, and to a lesser extent in Moncton and Halifax, the federal agency said. Prices accelerated in Ottawa and Montreal, it said.
The level of overvaluation across the country “is likely underestimated” because the temporary surge in disposable income generated by federal income supplements was more than offset by job losses, CMHC Chief Economist Bob Dugan said on a conference call.