By John Greenwood

Historically, bull housing markets have tended to end sharply with little warning. But among financial industry players there is growing consensus that this time will be different.

At a recent bank chief executive conference in Toronto, the heads of the major Canadian lenders agreed that the mortgage volume growth is moderating after a period of double-digit growth, partly because of moves by the federal government to tighten rules around mortgage lending. The thinking seems to be that residential real estate is headed for ‘soft landing,’ a healthy development that will eliminate some of the froth from the market.

“The slowdown in Canadian housing market finally appears to be hitting residential mortgages,” Barclays Capital analyst John Aiken said in a note to clients. Citing the latest statistics from the federal bank regulator, Mr. Aiken said mortgages held by the banks grew just 0.4% in November compared to the previous month, or 9% year over year.

“With recent real estate data indicating that sales activity in Canada’s real estate market continues to cool, we anticipate loan volumes should continue to ease,” he said.

That’s pretty much in line with a January 9 report by Andre Hardy, an analyst at Royal Bank of Canada, calling for a general slowing of consumer-related lending in 2013, with personal and mortgage loan growth averaging around 2% to 3% by the final quarter of the year.

Critics point out that despite the slowing mortgage growth, household debt, already at record levels, continues to rise. Bank of Canada Governor Mark Carney has repeatedly warned that elevated personal debt is one of the greatest risks facing the Canadian economy.