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.
“They should keep some resources at bay in case we run into some serious heavy weather in the years ahead,” Porter said.
Some thought more stimulus was appropriate, while others advocated for a return to balanced budgets in the medium-term, he added.
In a research note, economists at TD cautioned against taking stimulus actions that would significantly deepen the deficit. TD said the deficit for the current fiscal year was on track to hit C$34 billion ($25.58 billion), bigger than the government forecast of C$29.4 billion.
Morneau said it was impossible to say precisely what the economic impact of the new housing measures would be and expected they would ensure Canadians take on appropriate mortgages. Stress tests for insured home buyers will come into effect on Monday.
Prices for repeat sales of single-family Canadian homes rose 0.8 percent in September from August as the Toronto market continued to soar, according to the Teranet-National Bank Composite House Price Index.
A separate report from Statistics Canada showed prices for new homes rose 0.2 percent in August.
Additional reporting by David Ljunggren and Leah Schnurr in Ottawa; Editing by Chris Reese and Richard Chang