* Says housing market has evolved satisfactorily after new
* Addresses Scotiabank plea to avoid new mortage regulations
* Says health is fine; skin disease caused him to miss talks
By David Ljunggren
OTTAWA, Sept 9 Canada's housing market, which
once caused concern about possible overheating, has evolved in a
satisfactory way, Finance Minister Jim Flaherty said on Monday.
Canada did not suffer a U.S.-style housing crash during the
world economic downturn. Though its housing market slowed in
2012 after new rules were put in place, the market has since
built up steam, prompting a debate as to whether it has managed
a soft landing or is due for a crash.
The government and regulators tightened mortgage insurance
rules and underwriting guidelines several times between the
financial crisis and 2012. Flaherty told a news conference he
was comfortable with the way things had turned out.
Flaherty also said his health had improved significantly
since earlier this year. The minister has a rare skin disease,
which can lead to other complications.
Bank of Nova Scotia Chief Executive Rick Waugh said
last week that authorities should raise interest rates rather
than impose more regulations if it fears a bubble, since any
exuberance was a reaction to low rates.
Asked to react to that, Flaherty said: "I'm comfortable with
the way the housing situation has evolved. I tightened the rules
on mortgage insurance four times in the past several years, and
OSFI has also taken some action, the superintendent of financial
institutions, and I'm comfortable with what I've seen."
He noted that while the Bank of Canada's overnight rate had
not risen, mortgage interest rates have gone up.
Building permits in Canada jumped 20.5 percent in July, but
mainly due to plans for commercial buildings. The value of
housing permits rose by a relatively tame 4.1 percent after a
12.8 percent fall in June, and were 3.4 percent below levels of
a year earlier.
Flaherty flew to Moscow in July for a meeting of Group of
20 leading economies' finance ministers but was unable to attend
any of the sessions due to illness. He did, however, attend the
G20 summit in Russia last week.
"I did have some significant problems, as you know, earlier
this year. I spoke about them publicly, but things have improved
significantly and I'm continuing to get better, thank you for
asking," Flaherty, 63, told a reporter.