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Minister of Finance Jim Flaherty approves of tighter lending by banks, which he says has already cooled Toronto's condo market. (Adrian Wyld/Canadian Press)

   

Federal Finance Minister Jim Flaherty says changes at Canada's banks are cooling off Toronto's condominium market and he expects Vancouver's market will soon follow.

The minister says condo builders are telling him the market is moderating because banks are bringing in more stringent rules for loans for developments.   

Flaherty calls the banks' actions wise, saying he's warned of the dangers of an overheated housing market for some time.   

He says he would far prefer that the market to cool itself off, rather than the government step in to fix the problem.   

Flaherty notes that he has tightened up the mortgage insurance market three times in the last six years and he doesn't want to do it again.   

The minister made the comments to reporters after speaking about his budget to a crowd at Vancouver's Board of Trade.