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Housing markets in most major cities appear to be sound, but rising prices and a glut of supply have put Regina and Winnipeg at "high risk" of a correction.

Despite hot markets in Toronto and Vancouver, neither city is at much risk of a crash, the Canada Mortgage and Housing Corporation said in a new market analysis. Nationally, Canada's housing market appears to be 3 per cent to 4 per cent overvalued, said CMHC chief economist Bob Dugan.

But the picture is more dire in Regina, where home prices boomed in recent years and developers responded with an onslaught of new homes, particularly condominiums. That has left the city's housing market at high risk of a downturn, the federal housing agency said. It was a similar story in Winnipeg. In both cities, CMHC warned that prices have risen much faster than incomes and overbuilding has become a problem.

In Toronto and Montreal, record levels of condo construction and large numbers of unsold condos pose a moderate risk to housing markets, while in Vancouver, sky-high home values and strong price growth this year appear to be supported by economic fundamentals such as population growth and land supply, leaving the city at low risk of a crash.

Slowing home sales and flat prices have lowered the risks to housing markets in Edmonton and Calgary, CMHC said.

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To study the risk of a house price correction, CMHC considers four factors: If demand for homes outstrips supply, if prices start growing at a faster rate, if home prices start to seem overvalued compared to economic fundamentals, and whether builders respond to hot market conditions with too much supply. In the past, it has found that combinations of these factors have led to a spike in claims for its mortgage default insurance.

(Cities are listed from east to west.)

Paul Daly for The Globe and Mail

St. John's: Low risk

After years of booming prices, St. John’s housing market cooled in 2014. Average resale prices fell 3.4 per cent in the last quarter of the year compared to a year earlier, while new home construction dropped 40 per cent. The slowdown lowered the risk of a correction, CMHC said, but it warned that low oil prices were a “downside risk” to the city’s housing market.

Sandor Fizli/The Globe and Mail

Halifax: Low risk

The pace of home price growth slowed toward the end of last year, although prices were still growing faster than incomes given the region’s weak employment levels. Still, CMHC sees little risk of a correction. New housing starts have fallen so far this year compared to the same time last year, while average prices are up 2.4 per cent.

Tony Tremblay/iStockphoto

Quebec City: Moderate risk

Home prices have grown faster than incomes for a decade in Quebec, while stricter mortgage insurance rules have curbed demand from first-time home buyers, leading CMHC to warn that Quebec’s housing market was highly overvalued. Already average home prices have eased, falling 5 per cent in the last quarter of 2014, while new condo construction fell 20 per cent.

Brent Lewin/Bloomberg

Montreal: Moderate risk

Changes to rules around mortgage insurance over the past few years have hit the city’s first-time home buyers hard, particularly since Montreal home prices have been growing faster than incomes for more than a decade. Meanwhile, the city is in the midst of a condo boom, with units under construction at near-record levels. The condo market does appear to be slowing. The number of units under construction dropped 50 per cent in the first quarter of the year, although that has led to a surge in unsold condo units.

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Ottawa: Low risk

After a period of prices rising faster than incomes, Ottawa’s housing market slowed last year. Employment has fallen for five straight months as of February, leading to weaker home sales even as new construction jumped higher. Still, CMHC considers Ottawa to be a low-risk housing market.

Fred Lum/The Globe and Mail

Toronto: Moderate risk

Toronto’s home prices have been rising at a rate of about 6 per cent to 7 per cent a year, while incomes have grown by an average of just 2 per cent a year, raising the risk of a correction. Having reached a record-high level of construction last year, the city’s condo market is once again raising red flags. With the city bracing for an onslaught of newly built condo supply, Toronto could see a spike in unsold inventory, CMHC warned.

Markmcd/Wikimedia Commons

Winnipeg: High risk

Home prices have been rising much faster than incomes, while developers have responded to rising prices by flooding the city with new housing, leaving Winnipeg at a high risk for a correction. There are some signs that the market is cooling. Builders have pulled back on new single-family homes, although CMHC warned that condo developers will be slower to curb new condo construction. A jump in resale listings has also helped cool prices, which rose by just 1 per cent in the first quarter of the year, according to real estate agency Re/Max.

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Regina: High risk

Prices have been growing much faster than incomes in recent years and the city has faced a huge boom in new home construction. The number of vacant and unsold units on the market hit a record high last year, particularly among condominiums. Developers have scaled back so far this year, but coupled with the fallout from low oil prices, Regina’s housing market has been hard hit. Average prices have fallen nearly 6 per cent in the first quarter of the year compared to a year earlier.

Liam Richards for The Globe and Mail

Saskatoon: Low risk

Like its sister city Regina, Saskatoon has seen a boom in new construction, with the number of newly built and unsold units at historic highs. But prices, which were up 4.7 per cent in the fourth quarter, have been largely in line with economic fundamentals, CMHC said. Still, even as it called Saskatoon a low risk market, it flagged high levels of construction as a future concern.

Todd Korol/Reuters

Calgary: Low risk

The impact of falling oil prices has already helped cool Calgary’s market and lowered the risk of a housing correction. Price growth has slowed, but home values haven’t collapsed. Even so, with a fall in sales and a rise in new listings, the city is facing a buyer’s market for the first time in years, which could push prices down further. “We might expect to see some adjustment in house prices down the road,” said CMHC chief economist Bob Dugan.

Ian Jackson for The Globe and Mail

Edmonton: Low risk

Edmonton’s housing market has also been hit by the oil slump, but CMHC says home prices have been growing in line with income and population growth. Despite predictions that home prices should slow this year, both new construction and prices have continued to rise. Housing starts were more than double last year’s levels in February, while prices were up 3.5 per cent.

Darryl Dyck for The Globe and Mail

Vancouver: Low risk

CMHC is likely to raise some eyebrows with its assertion that Vancouver is among the country’s most balanced housing markets. Prices in some parts of the city have seen double-digit price growth this year. But move-up buyers in high-end and luxury properties are skewing the average prices in Canada’s hottest and most expensive housing market, said the agency’s chief economist Bob Dugan. CMHC sees ample supply of affordable housing for less wealthy buyers willing to purchase condominiums or homes in the suburbs. “We’re still going to continue to monitor Vancouver very closely because it is an important market,” Mr. Dugan said. “Nevertheless our models do not detect any signs of problematic conditions.”