CMHC says Toronto housing market at ‘high risk' of price correction

[Chad U.]

At long last, the monopolistic mortgage backer Canadian Mortgage & Housing Corp finally warns that the Toronto market is overpriced due to income growth not keeping up with soaring house prices.  

Interestingly enough, they feel that Vancouver is a low risk as the top 20% of highest priced houses skews the $1.4M average and if stripped out, this average drops to $550K. They also note that constraints on buildable land and the income growth supports these prices.  

What effect do you think this will have on general buying mentality in the Toronto area?  Do you think this warning will have a cooling effect on the Toronto market and other parts of Canada?

http://business.financialpost.com/personal-finance...

http://www.theglobeandmail.com/report-on-business/...