Canada's Flaherty: No 'doom and gloom' in Canada housing market

Canada's Finance Minister Jim Flaherty arrives for the Global Investment Conference 2013 in London May 9, 2013. REUTERS/Luke MacGregor

OTTAWA (Reuters) - There’s no “doom and gloom” in Canada’s housing market, Finance Minister Jim Flaherty said on Monday, suggesting he sees a soft landing rather than a U.S.-style collapse as demand and prices cool.

“When I look at the housing market, I’m looking for the ‘doom and gloom.’ I don’t see the ‘doom and gloom,’” Flaherty told reporters, referring to market players who predict Canada has a housing bubble on the verge of bursting.

“I see some moderation in demand. This is a good thing,” Flaherty said.

Canada’s housing market was red hot in the years following the 2008-09 recession. But it began cooling in the middle of 2012 in the wake of government moves to tighten mortgage lending rules.

Flaherty wished “bad luck” to any big U.S. hedge funds betting short-selling the Canadian market in the belief the housing market will crash, in hopes of making a profit.

Most economists in Canada are forecasting a gradual downturn in housing but there are a few outliers warning of a pending disaster given the record-high debt load of Canadian households at a time when interest rates can only go up.

Reporting by Louise Egan; Editing by Nick Zieminski