Close X
Thursday, November 14, 2024
ADVT 
National

Canadian Household Debt Rises To New Record High, Fuelled By Mortgage Growth

The Canadian Press, 11 Mar, 2016 12:17 PM
    OTTAWA — Canadian household debt rose to a new record high in the fourth quarter of last year, fuelled in large part by mortgage growth.
     
    Statistics Canada said Friday that total household credit market debt, which includes consumer credit and mortgage and non-mortgage loans, increased 1.2 per cent to $1.923 trillion at the end of last year.
     
    The total included $573.6 billion in consumer credit debt and $1.262 trillion in mortgage debt.
     
    The growth helped drive the ratio of household debt to disposable income to a new peak of 165.4 per cent in the fourth quarter, up from 164.5 per cent in the third quarter.
     
    That means Canadian households on average held $1.65 in debt for every dollar they earned after taxes and other fees paid to government.
     
    TD Bank economist Diana Petramala said low interest rates have allowed households to take on more debt, mostly backed by mortgages, and predicted the growth in debt will outpace income growth in the first half of this year.
     
    "Canadian consumer borrowing interest rates fell once again through the start of the year, which may only encourage a further acceleration in borrowing," she said.
     
     
    "While the increase in spending and borrowing will help support economic growth, households are increasingly becoming more vulnerable to a potential interest rate shock or slowdown in the housing market."
     
    However, Royal Bank economist Laura Cooper said the implementation of new mortgage regulations last month "may curb the appetite for mortgage loans to some extent."
     
    The changes mean homebuyers must make larger down payments for properties over $500,000.
     
    The household debt service ratio, the obligated payments of principal and interest as a proportion of disposable income, was 13.8 per cent in the fourth quarter, compared with 13.5 per cent in the third quarter.
     
    While household debt increased, a rebound in financial assets helped drive household net worth in the quarter by 1.6 per cent to $9.479 trillion.
     
    Financial assets increased 2.2 per cent after dropping for two quarters, buttressed by a 0.7 per cent increase in non-financial assets, which includes real estate.
     
     
    Statistics Canada said household net worth amounted to $263,200 on a per capita basis, up 1.5 per cent from the previous quarter.

    MORE National ARTICLES

    Canadian Teacher In Indonesian Prison Showing 'Great Resilience': Wife Says

    Neil Bantleman's family issued a statement on how the Ontario man has been faring since an Indonesian court overturned his acquittal last month.

    Canadian Teacher In Indonesian Prison Showing 'Great Resilience': Wife Says

    'Facebook To Become World's Biggest Virtual Graveyard By 2098'

    'Facebook To Become World's Biggest Virtual Graveyard By 2098'
    Social media website Facebook, which currently has 1.5 billion users worldwide, will turn into the world's biggest virtual graveyard by 2098

    'Facebook To Become World's Biggest Virtual Graveyard By 2098'

    Canadian Universities Dragging Heels On Sexual Assault Policies: Students

    Canadian Universities Dragging Heels On Sexual Assault Policies: Students
    A University of Victoria student is accused of sexually assaulting four women. Graduate students at the University of British Columbia allege the school delayed taking action on a serial abuser. 

    Canadian Universities Dragging Heels On Sexual Assault Policies: Students

    B.C. Mining Group Takes Concerns To Prospectors Convention In Toronto

    B.C. Mining Group Takes Concerns To Prospectors Convention In Toronto
    The Association for Mineral Exploration BC says the future of mining exploration and development is at risk because of a decreasing land base

    B.C. Mining Group Takes Concerns To Prospectors Convention In Toronto

    High Court Voids Alabama Ruling Against Lesbian Adoption

    High Court Voids Alabama Ruling Against Lesbian Adoption
    The justices threw out a ruling by the Alabama Supreme Court in a dispute between two women whose long-term relationship ended bitterly.

    High Court Voids Alabama Ruling Against Lesbian Adoption

    Supreme Court Rejects Apple Appeal Over Electronic Books

    Supreme Court Rejects Apple Appeal Over Electronic Books
      The justices' order on Monday lets stand an appeals court ruling that found Cupertino, California-based Apple violated antitrust laws in 2010.

    Supreme Court Rejects Apple Appeal Over Electronic Books