Canada’s government isn’t planning any major changes to its residential real-estate policy and doesn’t have plans to privatize the national housing agency within the next decade, Finance Minister Joe Oliver said.
Oliver, speaking Thursday in Toronto at the Bloomberg Canada Economic Summit, said the government is monitoring the housing market and isn’t concerned the recent price gains are unsustainable.
“We don’t see a need for an immediate shift in policy,” Oliver said. “But, at a certain point, we may need to make adjustments, and we will as appropriate,” Oliver said.
Oliver is more sanguine than some investors, who say gains in Canada’s residential real estate market are concerning, given record levels of household debt and the decline since June in prices for crude oil, Canada’s biggest export.
“This tide is now going out and we’re left with an overvalued housing market, an over-indebted consumer, and under those circumstances its hard to see this ending particularly well,” David Wolf, portfolio manager at Fidelity Investments, said earlier Thursday at the same event. He added that although the market isn’t in a bubble now, “further growth is very limited.”
Oliver’s predecessor, Jim Flaherty, had said privatizing Canada Mortgage and Housing Corporation was a possibility because its balance sheet had become too large, representing a risk to taxpayers.
While Oliver said he thinks the federal government “may be somewhat less of a player” in Canada’s housing market five years from now, he dismissed the notion when asked if the agency could be privatized over the next decade.
“I wouldn’t say it would be privatized,” Oliver said. “The CMHC has played a very important role in residential housing, and making housing more accessible to a broad range of people.”
Oliver, 75, said sudden government action on housing-market rules could disrupt the market.
“We don’t want to cause the very thing we’re trying to prevent,” he said. “We don’t think anything immediate, certainly nothing major and immediate, is needed.”