Finance Minister Sees Housing Market and Debt Improving
There’s a lot of talk that goes around about Finance Minister Jim Flaherty. But on Sunday he sat down with CTV’s Question Period to speak on the condition of the housing market and personal debt within Canada. And the good news, for those thinking he was going to tighten mortgage rules once again, he sees improvement just about everywhere.
“I talk to people in the condo business and I talk to people about houses and I keep track and we’ve tightened the rules four times on mortgage insurance and if we have to tighten them again, we will,” Flaherty said in the interview. “We have to be vigilant because that market is really important for jobs in Canada.”
But that’s not likely to happen, Flaherty continued, as it looks as though the soft landing he was trying to achieve is now in full swing.
“What we’ve been trying to manage, to the extent that governments can manage, the housing market is a soft landing that, that gradual reduction,” he says. “We’ve seen that; we’ve seen some softening in the housing market, including the condo market.”
And his positive sentiments don’t just rest in the housing market, but in the matter of personal debt as well.
“When you look at the debt to net-worth: As long as the housing market remains relatively strong we don’t really have a debt issue,” he says. “I worried about it when it came to housing, certainly, because some of the house builders and condo builders were telling me about young people graduating and buying way more house than they needed and driving up in an Audi and all that general stuff. So that worried me, but as I say, that market is calming somewhat. So I’m less concerned than I was.”
Flaherty also mentioned that he’s expecting to see an uptick in the housing market, as worries about the overnight lending rate increasing grow greater.
“The OECD and the IMF have both said to Canada we ought to let our interest rates go up a little bit,” he says. “So there will be some pressure there to let that happen.”