Calgary real estate market now has 'strong' evidence of problems: CMHC

Another red flag has emerged in Calgary's realestate market, with the Canada Mortgage and Housing Corporation now saying there's "strong overall evidence" of "problematic conditions" in the city.

Regina, Saskatoonand Toronto also shared the "strong" ratingin the CMHC's latestHousing Market Assessment report, released Wednesday.

The previous report, issuedthree months earlier, found weak overall evidenceof problemsin Calgary's housing market.

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CMHC economist Bob Dugan said evidence of overbuilding has increased since the previous assessment in Calgary and this could lead to lower prices.

"In some cases, a correction in housing prices may be required in order to ensure excess supply is absorbed so balance in the market can be restored," he said.

Edmonton, Winnipeg, Ottawa, Montrealand Quebec City had "moderate" overall ratings, while every other major city was rated as "weak" in the report, which looks at the first quarter of 2016.

The CMHCreportsaidlow oil prices are affectingAlberta and Saskatchewan, in particular, by "weakening demographic and economic fundamentals such as migration, employmentand income, which are in turn affecting housing markets."

CMHCdeveloped the quarterly assessments in an attempt to to detect "problematic housing market conditions" before they potentially lead to major market events"such as the house price bubble Toronto experienced in the late 1980s and early 1990s," according to the report.

Here is the full report: