Good news for the Housing Market

“Canada has done enough to prevent real estate crash like the U.S., Spain” Jim Flaherty, Finance Minister

Canada’s Finance Minister Jim Flaherty speaks during Question Period in the House of Commons on Parliament Hill in Ottawa October 18, 2012.

TORONTO – Canada has done enough to slow its housing market and prevent a crash like that seen in the United States or Spain, Finance Minister Jim Flaherty said on Saturday.

Speaking on CBC Radio, Flaherty said he had no plans to take further action to take froth out of the housing market, after a series of moves to tighten conditions for mortgage lending. The most recent change was in July.

“We’ve done enough, I do not intend to do any more,” Flaherty said, adding that he was pleased at signs of a slowdown in key sectors of the market, like the condo market in the big cities of Toronto and Vancouver.

Canada’s housing prices fell during the global recession, but the market bounced back stronger than before, with bidding wars for properties in many cities. The higher prices prompted fears that buyers were taking on too much debt, and that the market could be heading for a hard landing.

But the market has cooled abruptly since the last round of changes to mortgage rules, easing fears that debt levels would just continue to grow.

Figures released earlier this week show that sales of existing homes were 15.1 percent below year-ago levels in September, while the 3.9 percent rise in the home price index of the Canadian Real Estate Association was the smallest gain since May 2011.

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