OTTAWA (Reuters) - Canadian Finance Minister Jim Flaherty said on Monday that it is too early to assess the impact on the heated housing market or tighter mortgage rules introduced earlier this year, even though there have been some signs of cooling.
“The full impact has not been felt yet,” Flaherty told CTV Television in an interview.
He said there were several factors affecting the property market, including Canadian consumers heeding the repeated warnings by policy makers not to take on too much debt.
Canada’s housing prices fell during the global recession, but the market bounced back stronger than before, with bidding wars for properties in some major cities.
Low interest rates and higher home prices led to heavy borrowing and pushed the household debt-to-income ratio to the dangerous levels seen in the United States prior to its housing crash.
The federal government intervened in the mortgage market in July for the fourth time since 2008, making it tougher to take out a mortgage.
Flaherty, noting some signs of softening in the housing market, has said he has no intention of taking further action while the Bank of Canada has begun to signal that it could raise rates to curb soaring personal debt, something its mandate allows only in extreme circumstances.
Reporting by Louise Egan; Editing by Christopher Wilson and James Dalgleish