Newspaper article The Canadian Press

Oliver Says Ottawa Exploring 'Steps' for Hot Housing Market as Ministers Meet

Newspaper article The Canadian Press

Oliver Says Ottawa Exploring 'Steps' for Hot Housing Market as Ministers Meet

Article excerpt

Federal-provincial finance ministers gather


OTTAWA - Finance Minister Joe Oliver says the federal government could take "moderate steps" to address Canada's strong housing market as he began two days of meetings on Sunday with his provincial counterparts.

The two-day gathering is also expected to reveal the latest figures on federal transfer payments to the provinces as well as explore the effect of plunging oil prices.

On his way to the first meeting, Oliver was also asked about Canada's rising household debt and the country's potentially overvalued housing market -- two risks repeatedly raised by the Bank of Canada.

"In terms of household debt and the real-estate market, this is a subject, of course, we're monitoring very carefully," said Oliver, who reiterated his position that there is no housing bubble.

"So, we're not going to take any dramatic steps in that regard, but we may take some moderate steps."

Oliver did not elaborate and added his department had yet to make a decision on this subject.

"But our longer-term objective is to reduce the government's exposure to the mortgage market and we keep that objective in mind going forward," he said.

Oliver has said he intends to further reduce Canada Mortgage and Housing Corp.'s share of the mortgage insurance sector.

The Finance Department has tightened mortgage regulations on several occasions in recent years in an attempt to limit excessive speculation in the housing market and diminish the number of marginal buyers.

Last week, Bank of Canada governor Stephen Poloz warned the country's real estate market could be overvalued by as much as 30 per cent, though he also reiterated his prediction that a soft landing was still likely for Canada.

The bank used a new model to crunch numbers on the potential overvaluation of the housing market, a calculation that suggested it may be running between 10 to 30 per cent above where it should be.

Earlier this month, Poloz maintained the bank's trend-setting interest rate at one per cent, where it's been frozen since September 2010. Most experts don't expect the rate to increase until at least the middle of 2015.

There are concerns some Canadians might have accumulated too much debt in recent years to be able to handle rate hikes. …

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