WoW!
You guys owe a LOT of money.
Canadian Mortgages Inc has put together an interesting infographic that shows you at-a-glance the debt loads that Canadians are carrying.
Some highlights:
-Debt ratio is 163%, about what the US was at their peak
-In Total Ontario owes the most, followed by Quebec and then BC.
-Per capita debt is rising everywhere except Alberta
Read the original post here to view the full infographic.
Who cares? Government will bail everyone out!
Government will bail everyone out!
Just like they did in America! And that sure prevented any problems there, huh?
Isn’t this misleading? 163% is the total accumulated debt over yearly income, not yearly spending/yearly income.
I’d be interested to know yearly spending/income though.
Manulife withdraws low mortgage rate after consulting Ottawa
Hmmm, what happened after Manulife got called to the principal’s office? They didn’t just up the rate to match BMO,they went back to 3+.
@RaggedyRenter: “I’d be interested to know yearly spending/income though.”
From BC Stats, but includes both BC and Canada-wide numbers:
http://www.bcstats.gov.bc.ca/StatisticsBySubject/Economy/OtherEconomicStatistics.aspx
Click on “Survey of Household Spending”. It includes household incomes of those included in the sample. Unfortunately, it’s 2010 data published in 2012.
@Guy Smiley: Free Market Flaherty secretly a member of the Politburo Central Committee? Say it isn’t so!
I believe it’s actually at 165%. This data must be a couple months old.
Meanwhile, this report just in….
“Canadian housing market slowing down: report”
http://money.ca.msn.com/savings-debt/yourmoney/canadian-housing-market-slowing-down-report
TORONTO – Canada’s housing market is expected to continue to soften this year, as fewer people look to buy and home construction begins to slow down, according to report released Monday….
“Ultra-low interest rates will continue to provide support,” (Adrienne) Warren wrote…”
Wow.
In other news, Scientists report that people who eat more may gain the most weight.
Here is the thing I do not get. You would never borrow money to gamble or play the stock market, right. So why would you borrow money to buy depreciating assets like luxury cars (when a cheaper car that you can pay off in a reasonable amount of time would do), or investment condos. The first is even worse than gambling because when you have finally paid off the car, you are guaranteed to have an asset that has depreciated in value probably 50-70% whereas if you gamble, you at least have a probability of making money.
As for investment properties, unless you can shell out CASH for these things (and even then its a dubious investment), I would not even touch that with a 10 foot pole.
RaggedyRenter, exactly. I imagine some people are racking up debt at an alarming rate without overspending, purely due to the accrual of interest whilst making only minimum payments.
What the hell is Flaherty doing?
RE #3 RaggedyRenter:
“Isn’t this misleading? 163% is the total accumulated debt over yearly income, not yearly spending/yearly income.
I’d be interested to know yearly spending/income though.”
Agree. One can look at the CHANGE of this ratio yoy to estimate the aggregate deficit as a % of national personal income. For example, if the said ratio goes from 160 last year to 163 this year, it means collectively we are spending 3% more than we made in income for the past year.
did you notice how car commercials are now quoting bi-weekly payments instead of monthly.
soon it will come to daily numbers: “hey your Lexus payment is less then a lunch, what are you waiting for”
Its alarming how over 12 years of public education we cant seem to squeeze in at least one semester of a personal finance option or economics course. We need to educate our kids on rate of return, the wealth affect, inflation and what options are available for them to save or invest for retirement (RRSP, TFSA’s etc.); meh probably a real estate and retail lobby that has been working against this for some time.
I am amazed at how many young people I see taking out mortgages on overinflated assets, spending a high percentage of their income, house poor at 22 years old. They all say they need to own a home as an investment.
We never said things like that…but I guess we didn’t have Flaherty and 2003 to 2008 either.
Good idea Dan but I’m afraid it probably won’t help. People already gets all sorts of education at school that they then promptly throw out the window. People in general act on cultural expectations, emotions and impulse. Rarely do I see people analytically think about things that affect them. I guess what I am trying to say is that people aren’t rational and any amount of rational arguments will help.
When Future Shop resort to selling Health & Beauty products than you know retailers are desperate and consumer is tapped out
RE #3 RaggedyRenter:
“Isn’t this misleading? 163% is the total accumulated debt over yearly income, not yearly spending/yearly income.
I’d be interested to know yearly spending/income though.”
I’d be interested to know what the servicing costs are for this debt. There must be a line of no return at which point the carrying costs leave only two choices: bankruptcy or putting your one, large asset up for sale.
bon jovi Says:
March 19th, 2013 at 2:10 pm
When Future Shop resort to selling Health & Beauty products than you know retailers are desperate and consumer is tapped out
++++++++++++++++++++
With them being overly aggressive flogging electronics products, I’m not sure what my reaction will be when a sales associate / ex-realtor comes charging at me with a bar of soap in his hand.
Bon jovi, you don’t think it’s due to the tiny margins on electronics and that physical retail is getting hammered by online? I bet selling 50ml of perfume is more profitable than selling a 50″ TV. But probably not as profitable as selling a $50 USB cable.
@Vote Down The Facts
I think we already have TV in every room, kitchen and bathroom. Selling soap online is like scraping the bottom of the barrel for retailers.
Hypothetically, if Flaherty has the power to impose a minimum mortgage rate on all financial institutions, would it be a smart move? What are the consequences?
– padding banks’ margin. (To protect against future losses)
– reduce mortgage borrowing (To further control bubble)
– what are the negatives? (Beside the loss of free market)
Probably easier to just tighten lending rules..
“we cant seem to squeeze in at least one semester of a personal finance option or economics course”
I hope you are not suggesting that we cut things like square dancing in Phys Ed class to make room for finance and economics.
@VMD: Flaherty is simply too afraid to tighten lending rules further like he knows he ought. That’s the only reason he’s pulling this back-room weirdness. He knows that the banks continue to put his neck on the line and that the chances of Canadians actually getting religion are pretty much nil.
He’s trapped himself in a no-win situation; he has some huge lobbies breathing down his neck, Canadian real estate is teetering uncertainly on a precipice, and his smiling muscles are getting really tired as he strains to pretend that everything is fine.
Meanwhile, Manulife wouldn’t back off a deal unless Flaherty threatened them with something. I wonder what it was. It wasn’t so convincing that it kept them from going to the press, you’ll note.
