Suite of hous­ing mea­sures cool­ing mar­ket largely as ex­pected: Morneau

Realty Classifieds - - FRONT PAGE - By Andy Blatchford,

Ot­tawa: The fed­eral fi­nance min­is­ter says steps taken to tame Canada’s hottest hous­ing mar­kets have al­ready helped slow down a sec­tor he be­lieves was mov­ing at an un­sus­tain­able clip. Bill Morneau’s com­ments Tues­day fol­low this week’s re­lease of data show­ing Canada’s home sales for June posted their big­gest monthly plunge in seven years. The na­tional fig­ure was led by a drop in the Greater Toronto mar­ket. The new data pro­vided the lat­est ev­i­dence that steps taken at fed­eral, pro­vin­cial and mu­nic­i­pal lev­els have be­gun to tem­per the coun­try’s real es­tate sec­tor, par­tic­u­larly in the Van­cou­ver and Toronto re­gions. “What we’ve put in place has had some im­pact, and some im­pact in hav­ing a slight cool­ing in the mar­ket, which of course was our ob­jec­tive,’’ Morneau told The Cana­dian Press in an in­ter­view at his Ot­tawa of­fice. “We thought that the price in­creases in Van­cou­ver and Toronto, specif­i­cally, were un­sus­tain­able.’’ Ear­lier Tues­day, Morneau told a news con­fer­ence that changes in the hous­ing sec­tor were play­ing out “largely the way we thought it might.” He also noted, how­ever, that it was “too early” in the emerg­ing sit­u­a­tion to draw con­clu­sions. On a na­tional ba­sis, last month’s hous­ing trans­ac­tions were down 6.7 per cent com­pared with May, the Cana­dian Real Es­tate As­so­ci­a­tion said Mon­day. It was the third-straight monthly de­crease and the Greater Toronto Area reg­is­tered a 15.1 per cent drop. Com­pared to May, sales fell last month in 70 per cent of all lo­cal mar­kets mea­sured by the as­so­ci­a­tion, in­clud­ing the Lower Main­land in B.C., Mon­treal and Que­bec City. Ear­lier this year, the On­tario gov­ern­ment put in place more than a dozen mea­sures to curb the Toronto mar­ket, in­clud­ing a 15 per cent tax on for­eign buy­ers. Since then, sales in Canada’s largest city have slowed. A num­ber of fed­eral mea­sures have also been in­tro­duced in re­cent years to ad­dress hous­ing mar­ket con­cerns dur­ing the ex­tended pe­riod of low in­ter­est rates. They’ve in­cluded higher min­i­mum down pay­ment re­quire­ments, re­duced amor­ti­za­tion pe­ri­ods and stress tests on in­sured mort­gages. Sep­a­rately, mort­gage in­ter­est rates have started to rise fol­low­ing last week’s hike in the Bank of Canada’s bench­mark in­ter­est rate. The fed­eral bank­ing reg­u­la­tor re­cently pro­posed to ex­pand stress tests to in­clude unin­sured mort­gages as part of the ef­fort to tighten lend­ing rules. Asked about the rec­om­men­da­tion by the Of­fice of the Su­per­in­ten­dent of Fi­nan­cial In­sti­tu­tions, Morneau said the mea­sures un­der con­sid­er­a­tion are slightly dif­fer­ent be­cause they’re clearly aimed at the higher-end part of the mar­ket. In the months ahead, Morneau said the fed­eral gov­ern­ment will re­main vig­i­lant. “We’re go­ing to be care­ful as we do this ev­ery step along the way,” he said. “We need to con­tinue to fo­cus on this mar­ket. We’re not go­ing to as­sume that the mea­sures that we’ve put in place so far have nec­es­sar­ily given us com­fort that the mar­ket’s ex­actly where we want it to be.”

Bill Morneau

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