Canada housing market has calmed: finance minister

Tue Sep 17, 2013 5:11pm EDT
 
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OTTAWA (Reuters) - Canadian Finance Minister Jim Flaherty said on Tuesday he is less worried about overheating in the housing and condominium markets, despite a mid-year bounce in sales, but he stands ready to intervene if there are signs of an emerging housing bubble.

In an interview with BNN television, Flaherty said he meets builders and bankers to discuss the real estate market, meeting the latter this week in Toronto.

"It's calming, which is good, especially the condo market which was quite worrisome in Vancouver and Toronto, and a little bit in Montreal also," he said.

"I'm comfortable with where we are, but we have to watch and, if we see anything moving toward a bubble, we can intervene."

Flaherty has already stepped in four times since 2008 to tighten mortgage lending rules to slow the real estate market and excessive consumer debt. The market slowed considerably after his latest measures in mid-2012, but regained momentum in the busy spring season of 2013.

Existing home sales rose in August from July and were much higher than a year earlier, the Canadian Real Estate Association said on Monday. The organization's home price index rose 2.9 percent in August from a year earlier.

Canada reported unexpectedly strong factory sales for July on Tuesday, but when asked about this sign of strength, Flaherty said the domestic economy was "still fragile."

He said the recovery in Europe was "tenuous," but the U.S. recovery looked "credible."

"That's very encouraging for Canada," he added.

(Reporting by Louise Egan; Editing by Jeffrey Hodgson and Andre Grenon)

 
The light from the sunset reflects off apartment blocks and office buildings in the city of Burnaby in this view from Cypress Mountain in West Vancouver, British Columbia August 20, 2013. REUTERS/Andy Clark