Canada Mortgage and Housing Corporation has concluded that the country's housing market "remains highly vulnerable".
This is "primarily due to evidence of overvaluation and price acceleration in Toronto, Vancouver, Victoria, and Hamilton".
The Housing Market Assessment report points out that the sales-to-available ratio dipped to five percent for single detached homes in West Vancouver from May to June. The ratio was just eight percent in South Surrey and White Rock, and nine percent on Vancouver's West Side and in Richmond.
According to CMHC, a balanced market has a ratio of between 10 to 18 percent.
"Current price levels are far higher than the upper predicted values from price models based on demand and supply fundamental factors such as population, income, financing costs, and land supply," CMHC stated.
The market for more expensive homes has slowed considerably since the B.C. NDP announced a new surtax on properties assessed at more than $3 million.
In addition, the B.C. NDP government increased the foreign-buyers tax from 15 to 20 percent and extended it from the Lower Mainland to parts of Vancouver Island and the Central Okanagan.
The ruling party plans to bring in a housing-vacancy tax this fall.