Canada home prices rise further, government says to remain vigilant

Thu Oct 13, 2016 5:33pm EDT
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By Andrea Hopkins and Alastair Sharp

OTTAWA/TORONTO (Reuters) - The Canadian government will closely watch the country's housing market but has no imminent plans for further cooling measures, its finance minister said on Thursday, as data showed prices were still on the rise.

Canadian resale home prices rose in September, while new home prices were up in August, separate reports showed, suggesting that slowing sales in some regions have not cooled prices.

Low borrowing costs have kept Canada's housing market robust since the financial crisis, but surging prices in Toronto and Vancouver have fueled concerns about a potential housing bubble.

Canada's Liberal government tightened mortgage rules and closed a tax loophole on home sales earlier this month in its latest bid to cool the market.

Finance Minister Bill Morneau told reporters in Toronto, after meeting economists for pre-budget consultations, that the government did not have more measures to announce imminently.

"We will remain vigilant in watching the market to ensure that it is stable for the long-term," he said.

The government will release an economic and fiscal update this fall.

Doug Porter, chief economist at BMO Capital Markets, said he and some others at the meeting counseled the government to be patient as its stimulus announced earlier this year takes hold, rather than embarking on fresh measures.   Continued...

Construction workers chat on a condominium building site in Toronto, Ontario, Canada October 3, 2016. REUTERS/Chris Helgren