(Adds finance official comment, paragraph 10, details from quote, paragraph 3) OTTAWA, March 23 (Reuters) - The Bank of Canada is seeing evidence of investor activity and “a lot more flipping” in some Canadian housing markets and is concerned that “fear of missing out” may also be driving price gains, a deputy governor told Reuters on Tuesday. In an interview, Toni Gravelle said the central bank was poring over anecdotal evidence and data to try to suss out how much of the recent escalation was due to pandemic-related demand shifts and how much to excessive exuberance. In some cities, “we have data on investment purpose, versus living-in purpose ... we have data on how long before it went back on the market. Those things ... they (would) indicate a lot more investment activity, a lot more flipping,” said Gravelle. He added that much of the data on investor activity was specific to cities like Toronto. “That data is limited and it’s not across Canada, that’s the issue,” he said. Gravelle also said that Canada’s red-hot housing market had taken a front seat in regular talks between the Bank of Canada and the federal government in recent months. “Definitely, as the winter went on and the spring started, our discussions have been more heavily proportioned to housing,” he said. Toronto-area housing prices surged in February, with the average selling price in Canada’s biggest metropolis topping C$1 million ($795,000) for the first time. Across Canada, housing prices jumped 25% in February compared with a year earlier. The Bank of Canada has limited tools to cool the housing market. In past bubbles, the federal government has tightened lending requirements and provinces have imposed new taxes to calm frenzied buying. Policymakers have so far been unwilling to intervene for fear of undermining the economic recovery from the COVID-19 pandemic. “The federal government has taken action to support Canadians’ access to housing and reinforce the long-term stability of the Canadian housing market. We continue to closely monitor the health and stability of the housing market,” a Department of Finance official said. Gravelle said the Bank expected to be able give more detail on housing markets and housing indebtedness in its April policy update but that much of the analysis would come in May. “One of the concerns we’re having is there’s starting to be ‘fear of missing out’ ... and that might be driving some of the expectations,” Gravelle said earlier in a question-and-answer period that followed a speech. The hotter-than-expected housing market is one of the factors that prompted the Bank of Canada to revise up its outlook for economic activity in the first quarter of 2021, said Gravelle. He also said the central bank was looking at how it could adjust its quantitative easing (QE) program. “Regarding our ongoing purchases of (Government of Canada) bonds, Governing Council is evaluating how the process of adjusting these could unfold,” he said. “Adjusting the pace of QE purchases won’t necessarily mean that we have changed our views about when we will need to start raising the policy interest rate,” Gravelle added. The Bank of Canada has pledged to keep interest rates at the effective lower bound of 0.25% until the economic slack is absorbed, which is not expected until into 2023 under current projections. The Bank will update those projections in April. The Canadian dollar weakened 0.5% to 1.2586 to the greenback, or 79.45 U.S. cents, as oil prices tumbled. (Reporting by Fergal Smith in Toronto and Julie Gordon in Ottawa; writing by Julie Gordon; Editing by Marguerita Choy and Peter Cooney)