The Canada Mortage and Housing Corporation says that overvaluation and overbuilding problems have worsened in several markets – including Ottawa – since the last quarter.
“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,” reads the CMHC’s latest Housing Market Assessment. “As more centres are now showing problematic overbuilding conditions, the necessity of inventory management is more pronounced.”
Although the problems aren’t as pronounced as in, say, Calgary, where “the overall level of evidence of problematic conditions detected by our framework has moved from moderate to strong … due to the detection of overvaluation and overbuilding,” there is moderate evidence of problematic conditions in Ottawa.
Much of the concern in Ottawa centres around an overheated condo market, the corporation reports.
“Ottawa’s housing market showed weakening evidence of overvaluation while showing more evidence of overbuilding. The number of completed and unsold condo apartment units per 10,000 population rose, pointing to moderate evidence of overbuilding.
“This increase in unsold units was also accompanied by rising vacancy rates in primary and secondary rental markets. Despite a decline in condo apartment units under construction, inventory management is still needed since there is a high number of completed and unsold condo apartment units.”
The news comes as the city and the National Capital Commission are contemplating how to redevelop the LeBreton Flats. Both competing bids call for the construction of thousands of new condo units.