“Overbuilding” cited in seven cities

Seven Canadian cities are seeing more new homes being built than demand suggests, according to a study by Canada Mortgage and Housing Corporation (CMHC) – and the worst offenders are on the Prairies.
In its recent Housing Market Assessment, CMHC pointed to Saskatoon and Regina has having the most severe overbuilding. Both cities have seen near record-high new home starts in recent years, but lower oil and commodity prices have subsequently helped to cool new housing demand.

Other cities with more moderate overbuilding are Calgary, Winnipeg, Ottawa, Moncton and St. John’s. CMHC notes that “supply is adjusting to demand” in the two Atlantic region cities, however.
CMHC also found that two Ontario cities have more to worry about than too many homes being built.
“Toronto and Hamilton continue to face price acceleration, overvaluation and overheating. Price growth has intensified and demand is outpacing supply in the rental, resale and new home markets,” the agency warns.