UPDATE 1-IMF says Canada housing is still overvalued
* Housing overvalued by 10 pct, signs of overbuilding
* Jury still out on whether further mortgage tightening needed
* Sees Bank of Canada rate hike in late 2013
By Louise Egan
OTTAWA, Feb 14 (Reuters) - Canadian housing prices were about 10 percent overvalued at the end of 2012 despite government efforts to rein in the market, the IMF said on Thursday, and it warned that authorities may have to intervene a fifth time in the mortgage market if personal debt levels do not stabilize.
The International Monetary Fund, in its annual report on Canada, also said Canadian dollar was between 5 and 15 percent higher than warranted by long-term economic fundamentals.
Although government measures since 2008 to cool overheated mortgage borrowing and house prices have helped prevent a U.S.-style housing bubble, residential prices and construction are both still excessive, the IMF said, based on its meetings with Canadian officials from Dec. 3-18.
"The jury is still out on whether this is going to take care of the problem," Roberto Cardarelli, IMF mission chief for Canada, told reporters in Ottawa after releasing the report.
Since the IMF conducted its study, there have been more signs of moderation in the housing market. Home prices grew at the slowest pace in three years in December year-on-year, and housing starts fell more steeply than expected in January. Continued...