Victoria's real estate market might not be as overheated as some think, according to a new report from the Canada Mortgage and Housing Corporation.

"When it comes to overvaluation we see weak evidence of that," said Aida Niavarani Zadeh, a senior market analyst with the CMHC.

"The prices that we're seeing right now are actually being supported by fundamentals such as growth in population that we've seen in Victoria or full time employment which has gone up, as well as the low mortgage interest rates."

The CMHC's Housing Market Assessment, which looked at data from the fourth quarter of 2015, found weak evidence of overheating, price acceleration and overbuilding in Victoria.

Out of the 15 cities or CMAs (census metropolitan areas) examined in the report, Victoria and Halifax were the only regions to show weak evidence of these conditions.

Vancouver, in comparison, showed strong overvaluation.

The benchmark price for a single family home in Victoria was $663,300 for March 2016, according to the Victoria Real Estate Board. That was an increase of 16.4 per cent from the benchmark price of $569,700 in March 2015.

When asked why some homes in the city are selling for well over the average asking price, Zadeh placed the blame on demand.

"The demand is currently running ahead of supply, and that is what's putting this pressure on prices. Single detached homes in certain price segments and areas of the city are actually seeing higher sales and upward pressure on prices," she said.

"However, having said that we can say that the market is remaining well supplied by a variety of home types at different price points."

With files from CBC's All Points West

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