Canadian Finance Minister Jim Flaherty said he’s planning to make changes to reporting requirements for Canada Mortgage & Housing Corp., the country’s housing agency, particularly with respect to securitization.
Flaherty, speaking to reporters in New York, said there has been a moderation in the country’s housing market, adding he would prefer that the market correct itself, if needed.
“I would prefer the market itself to correct to the extent that a correction is necessary,” Flaherty told reporters after attending a conference organized by the Bush Center.
Policy makers, including Flaherty, have said that parts of Canada’s housing market have become overvalued as households add to record debt levels, encouraged by some of the lowest mortgage rates in decades. Canada’s banking regulator, the Office of the Superintendent of Financial Institutions, said in a planning document last week it will boost supervision of private mortgage insurers while examining “emerging” risks to the financial system in several areas, including residential mortgages.
Flaherty, who has resisted calls from lenders to tighten mortgage rules to stem demand for new homes, said in his March 29 budget the government will enhance the governance and oversight of CMHC to ensure “its commercial activities are managed in a manner that promotes the stability of the financial system.”
“We do intend to have some changes with respect to reporting by CMHC, particularly with respect to securitization,” Flaherty said today, adding the country’s banking regulator is “engaged” on the matter.
British Columbia Finance Minister Kevin Falcon, also in New York at a separate event, said he expects home prices in his province to drift “downward,” which he said would be a healthy development. He also said demand from China for high-end homes in Vancouver will probably continue.
Flaherty today also said he expects to see moderate economic growth in Canada amid a global recovery that remains “fragile.”
“There are serious issues that persist in Europe,” Flaherty said, citing investors concerns about Spain’s finances. “They are not quite out of the woods yet.”