Finance Minister Jim Flaherty announced Wednesday that there will be no more tightening of mortgage rules, following a series of revisions beginning in January.
Speaking from the heart of California’s Silicon Valley, Flaherty said he was happy with the results of recent changes such as lowering the cap on amortization terms.
"There has been some softening in the past month or so,” he said. “So right now there is no intention to intervene again.”
Canada’s over-heating housing market has long been a concern for Ottawa, with home prices hitting a record high for the third straight month in June.
The condo market has been a particular source of contention, with many developers and economists worrying about the sustainability of growing markets in major cities.
"We always monitor the housing market,” said Flaherty. “There has been concern, particularly with the condo market in Toronto and Vancouver. We have taken steps, including recently in June, another step to tighten the market for residential mortgages.”
Since the changes to insured mortgage rules took effect last month, the finance minister has expressed confidence in the pace of change, but only hinted at their effectiveness. Wednesday’s comments mark a change.
Still, conditions for lenders and borrowers remain tighter, which could spell good news for landlords with existing properties.
Confident that the real estate market will continue to cool, Flaherty aims to shift his focus to economic stimulus in a bid to balance Canada’s budgets for the long term.
"We are seeing modest growth, not as much as Americans and Canadians would like it to be, but it is growth. And that's better than many Western countries."
Written by Jemima Codrington