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Canada's federal housing agency raised its assessment of the market's vulnerability to high from moderate in a report Tuesday, as Montreal joined Toronto as being under major pressure. Canada Mortgage and Housing Corp.'s report now shows high risks in six of 14 cities it tracks .

"Home price acceleration, alongside continued overvaluation, as home prices further detach from fundamental factors, such as labour income, has created a high degree of vulnerability in Canada's housing market," the report said.

CMHC is showing more discomfort with the surge in housing sales and prices than the BOC, which has cited risks while also saying a good part of the recent run-up is linked to fundamental demand for bigger houses during the pandemic. CMHC also faced criticism earlier in the housing boom for a dire forecast that didn't materialize.

Sources have told MNI that a recent federal election was unlikely to bring major solutions to a surge that's pushed YOY home prices up as much as 40% this year.