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About the Housing Market Assessment
The Housing Market Assessment (HMA) identifies significant imbalances in the housing market that could increase the risk and consequences of a housing market downturn.
Such scenarios, particularly a price correction, can have significant negative impacts on:
- households
- the housing industry
- and the economy more broadly
The HMA results help key stakeholders and policy makers make appropriate decisions to generate a smooth transition towards more balanced market conditions.
The HMA framework looks at the state of the housing market vulnerability, by assessing potential imbalances using 4 key factors:
- Overheating: when demand significantly outpaces supply
- Price acceleration: when house prices rise at an increasing pace over a sustained period
- Overvaluation: when house prices differ significantly from their level consistent with housing market fundamentals (such as labour income, population and interest rates)
- Excess inventories: when there is an unusually high level of vacant housing units
The Housing Market Assessment isn’t intended to assess affordability.
Affordability relates to the cost of housing that meets the needs of a household at a reasonable share of their income. This aspect of housing is not covered in the Housing Market Assessment.
Even in a balanced housing market with a low level of market vulnerability, households in lower income brackets may still have difficulty finding shelter that is affordable and meets their needs.
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