Canada's housing market set for soft landing after recent gains: economist
Economist predicts cooldown after years of strong gains and recent moves to curb demand
Canada's housing market will have a "soft landing" after years of strong gains and recent steps by policy makers to curb demand, according to a senior economist.
"Things don't look too out of whack" for housing and consumer finances, Michael Gregory of BMO Capital Markets told investors during a panel discussion at the Bloomberg Focus Day Symposium in Toronto.
"Housing is going to cool. A soft landing still seems to be unfolding," he said.
Finance Minister Jim Flaherty has tightened lending rules and sought greater control over the country's housing agency on concerns about overbuilding of flats in Toronto and Vancouver.
Flaherty has said that his moves should be enough to prevent a bubble, but existing-home sales have risen for seven straight months and housing starts increased 5.3 per cent in September, led by flats.
Risks remain in the housing market, according to others on the panel including Eric Lascelles, chief economist at RBC Global Asset Management.
"There is clearly quite an excess on the condo side across the country but with obvious relevance to Toronto" for new construction, he said. "It points to particular weakness in that area, but not of a systemic variety."
