UPDATE 1-Flaherty comfortable with Canada's housing situation, his health

Mon Sep 9, 2013 12:37pm EDT
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* Says housing market has evolved satisfactorily after new rules

* Addresses Scotiabank plea to avoid new mortage regulations

* Says health is fine; skin disease caused him to miss talks

By David Ljunggren

OTTAWA, Sept 9 (Reuters) - Canada's housing market, which once caused concern about possible overheating, has evolved in a satisfactory way, Finance Minister Jim Flaherty said on Monday.

Canada did not suffer a U.S.-style housing crash during the world economic downturn. Though its housing market slowed in 2012 after new rules were put in place, the market has since built up steam, prompting a debate as to whether it has managed a soft landing or is due for a crash.

The government and regulators tightened mortgage insurance rules and underwriting guidelines several times between the financial crisis and 2012. Flaherty told a news conference he was comfortable with the way things had turned out.

Flaherty also said his health had improved significantly since earlier this year. The minister has a rare skin disease, which can lead to other complications.

Bank of Nova Scotia Chief Executive Rick Waugh said last week that authorities should raise interest rates rather than impose more regulations if it fears a bubble, since any exuberance was a reaction to low rates.   Continued...