Canadian house prices "slightly overvalued"

Canadian house prices are "slightly overvalued", the Canada Mortgage and Housing Corp has cautioned.

In its quarterly measure of four risk factors for the country's property market, the federal agency said that overall, prices are 3 to 4 per cent overvalued, but that this is below 8 per cent threshold considered to be problematic.

The agency dismiessed concerns about overheating or overbuilding, which see demand outpace supply or vice verse, although it said that Toronto and Montreal are at moderate risk of overvaluation, as prices rise faster than income.

The national average home price continues to be upwardly distorted by sales activity in Greater Vancouver and Greater Toronto, warned the Canadian Real Estate Association in its the latest report.

Greater Vancouver (8.50 per cent) and Greater Toronto (8.43 per cent) posted the biggest year-over-year price increases in April 2015. Excluding these two markets from calculations, the average Canadian price has risen by 3.4 per cent.


Reuters