Brokers will likely breathe a sigh of relief following Finance Minister Joe Oliver’s statement that the government will not make any sudden changes to the housing finance system.
“We’re looking at things, but we’re not going to be doing anything dramatic,” Oliver said in an interview in Cairns, Australia, according to the Financial Post. “We don’t see the need for it.”
The statement follows just days after CMHC President and CEO Evan Siddall confirmed that the crown corporation will consider offloading some of the housing finance risk to banks.
“In our role as an adviser to government, we are evaluating a range of ideas on future improvements to our housing finance system, including risk-sharing with lenders to further confront moral hazard, future sandbox changes if housing markets are to become less stable, and increased capital requirements,” Siddall told the Saint James Club, according to a release posted on CMHC’s website.
However, Oliver has intimated that no rash decisions will be made.
“We certainly aren’t going to do anything precipitous,” Oliver said. “You don’t want to cause the very thing you are trying to prevent.”
Oliver did confirm that the government is merely considering the option.
“Obviously it’s one of the things one looks at, but I don’t want to signal we’re doing anything,” he said.
This careful, calculated approach will likely be commended by many industry players. Former Finance Minister Jim Flaherty
– who implemented a number of rule changes that effectively slowed the market while helping to manage risk – drew the ire of many brokers who felt his meddling had a negative impact on business as a result.