Close X
Friday, January 10, 2025
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

    CNN Reporting From Cape Breton As Trump-Inspired Spotlight Continues

    CNN Reporting From Cape Breton As Trump-Inspired Spotlight Continues
    The cable news channel is following up on reports that a local website encouraging U.S. citizens to move to Cape Breton has gone viral, attracting more than 300,000 hits in the past two weeks.

    CNN Reporting From Cape Breton As Trump-Inspired Spotlight Continues

    New Brunswick Premier Looks To Draw Cybersecurity Jobs With Centre Of Excellence

    Premier Brian Gallant was in San Francisco Tuesday to promote the province to information technology companies at a major cybersecurity conference.

    New Brunswick Premier Looks To Draw Cybersecurity Jobs With Centre Of Excellence

    Consumers Eye New Options As CRTC-Mandated Trimmed Down TV Takes Effect

    Consumers Eye New Options As CRTC-Mandated Trimmed Down TV Takes Effect
    Canada's major TV service providers say it's too early to tell how many of their customers will choose to switch to the new slimmed-down services that are on offer as of today.

    Consumers Eye New Options As CRTC-Mandated Trimmed Down TV Takes Effect

    Market-oriented Group Wants To Speed 'Once-in-lifetime' Clean Economy Transition

    Market-oriented Group Wants To Speed 'Once-in-lifetime' Clean Economy Transition
    Smart Prosperity officially launches Tuesday in Vancouver with a boost from Prime Minister Justin Trudeau, whose Liberal government's climate agenda appears to dovetail with the economic transformation envisioned by the new market-oriented group.

    Market-oriented Group Wants To Speed 'Once-in-lifetime' Clean Economy Transition

    Forcing News Outlet To Turn Over Source Materials 'Dangerous,' Court Told

    Forcing News Outlet To Turn Over Source Materials 'Dangerous,' Court Told
    Iain MacKinnon tells Ontario Superior Court that RCMP were on a sweeping fishing expedition when they asked Vice Media and its reporter for its records.

    Forcing News Outlet To Turn Over Source Materials 'Dangerous,' Court Told

    Albertans Asked To Give Input On Doctor-assisted Death In Online Survey

    EDMONTON — The Alberta government wants to hear what residents think about doctor-assisted death.

    Albertans Asked To Give Input On Doctor-assisted Death In Online Survey