In an interview with Business News Network television on Tuesday, Canada’s Finance Minister Jim Flaherty said that, despite a mid-year bounce in sales, he is not overly worried about overheating in the housing and condominium markets, though clarified that he stands ready to intervene if there are signs of an emerging housing bubble.
He mentioned that he has been meeting with builders and bankers to discuss the real estate market, with upcoming meetings with the latter taking place in Toronto this week.
“[The Canadian housing market] is 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 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.
The Canadian Real Estate Association reported on Monday, that existing home sales rose in August, and were considerably higher than a year earlier. The organization’s home price index rose 2.9 percent in August from a year earlier as well.
Though reporting unexpectedly strong factory sales for July, when asked about this re-emerging sign of Canadian strength Flaherty said the domestic economy was “still fragile”, with “tenuous” recovery in Europe, but a “credible” looking U.S. return to form. He noted that this was an encouraging sign for Canada.
Update: The Vancouver Real Estate market is coming back nice and strong. The market is still seeing awkward pressure in all directions but housing prices continue to rise at a reasonable pace. House prices are still lagging behind the condo and attached markets but that is to be expected. Never the less the market is conituing to grow for the forseeable future.