BC personal debt passes shoulders, up to eyeballs

This is mostly stuff you’ve heard before.

Canadian personal debt loads continue to grow, now higher that many US bubble markets at their peak.

But here’s a number you may find surprising.

Here in BC if you strip out mortgage debt, the average consumer debt load is $38,672!

Thats nearly 40 grand in NON-MORTGAGE debt.

That means the amount we carry on credit cards, bank loans, lines of credits and car loans is 42.5 per cent higher than our fellow Canadians.

And that’s probably because, after paying for housing, we’re unable to find cash for other things that normally are part of a middle-class lifestyle.

On Tuesday, Royal Bank Economics reported on national housing affordability, pointing to a deterioration in affordability since the first quarter.

In major markets such as Vancouver, Toronto and Montreal, the report says it is now “somewhat of a stretch for typical households to own a single-family home.”

But, in Vancouver, trying to buy a single-family home is more like being put on the rack.

Read the full article over at the Vancouver Sun.

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Softy
Guest
Softy

Growning debt loads contribute to a soft landing. If debt began to fall, signalling reduced spending, I might be concerned for real estate. The more debt the better. It’s a soft landing after all.

specuskeptic
Member

Start with conclusion, contort sometimes questionable facts to support conclusion and, voila, a Softy™ post is born!!

Beuller
Guest
Beuller

Ever heard of a tipping point? Man you’re dumb.

Nix
Guest
Nix

Good point softy, I thought more debt would lead to less cash flow, more bankruptcies, and more foreclosures in a rising interest rate environment. Thanks for setting the record straight!

Interest Only
Member
Interest Only

Softly that is partly true.

But the best analogy would be a person on death row who is desperately trying to put forward appeals in order to delay the inevitable. I wouldn’t call that a soft landing. Remember a soft landing today could just be a delayed hard landing.

James
Guest
James

Some people might take out a line of credit to gamble, I mean invest in the equity, futures and bond markets. Counting this against personal debt makes the situation look worse than it really is, because net equity is unchanged.

Softy
Guest
Softy

“I thought more debt would lead to less cash flow, more bankruptcies, and more foreclosures”

Why would you think that when it has not happend in the last 12 years of debt growth?

“in a rising interest rate environment.”

Long term rates are increasing, short term rates, which govern most of the non-mortgage debt that the article is talking bout, are not increasing.

Vancouverites can devote more and more income to the mortgage as long as they keep consuming on debt. I’m not saying that this will make Vancouver RE prices rise further as they are rising the rest of Canada, but falling prices are incompatible with rising debt.

The credit flood is flowing freely here. People will stop spending only when forced and there are obviously no breaks on credit flow in BC.

logic
Guest
logic

softly, you are fucking moron.

Harry Wang
Guest
Harry Wang

“Outside the Louvre in Paris, there’s a sign in Mandarin which tells visitors not to defecate in the surrounding grounds. This sign is only written in Mandarin Chinese. No other nationality, it appears, needs to be reminded where it is and is not appropriate to shit in the vicinity of metropolitan France’s art museums. Every other nation on earth understands implicitly the social contract they’re signing up to: that, in exchange for their continued participation in art, visitors must shit only within the white porcelain bowls located inside the designated toilet zones. Not on the pavements. Not even in the bins, or on the breakfast bar of their hotel, or between the tits of a passing waitress. Just the toilets, thanks.”

http://m.vice.com/en_uk/read/are-chinese-tourists-the-worst-tourists-in-the-world

patriotz
Member

“Good point softy, I thought more debt would lead to less cash flow, more bankruptcies, and more foreclosures ”

Foreclosures are the result of falling prices, not inability to pay the mortgage. As long as prices are still rising people who have trouble making payments can simply sell.

Softy
Guest
Softy

How ironic is it that someone named “logic” said this:

“softly, you are fucking moron.”

Barack Obama:

We cannot mistake absolutism for principle, or substitute spectacle for politics, or treat name-calling as reasoned debate.

Charles R Anderson:

Observe which side resorts to the most vociferous name-calling and you are likely to have identified the side with the weaker argument and they know it.

Aggregator
Guest
Aggregator

Bad news: BC consumer proposals up 16.1% y/y in June. http://i.cubeupload.com/lfwUgZ.png

Good news: Rising consumer proposals explains why BC-Van retail sales for jewellery and Louis Vitton bags are plummeting. http://i.cubeupload.com/CeWUit.png

Perhaps this also explains why these millennials (students) are willing to wait a whole day in a mile-long line up just to get the lowest prices on casual wear.

Shoppers go crazy for Aritzia warehouse sale http://www.vancouversun.com/Video+Shoppers+crazy+Aritzia+warehouse+sale/8839558/story.html

Burnabonian
Guest
Burnabonian

Haha I love you Softy.

“We have been adding weight to this camel’s back every month for 12 years, and although there was audible cracking, it has not yet killed the camel.

“THIS PROVES that everyone who was worried about the load was and always will be WRONG! Their mothers are wrong, their unborn children are wrong, and those of us who believe that a camel’s carrying capacity is infinite have been permanently and indefinitely proven correct.”

Softy, can you hear how silly that sounds?

Can you imagine, then, how silly it sounds when you say the same thing about million-dollar crack shacks?

Shouldn’t you be busy putting your face on a bus stop bench? Or have you been… curiously… not that busy these last few months?

Do tell.

Pdub
Guest
Pdub

Softy is correct as always. No need to worry about that debt as incomes are “growning” so fast and everyone has so much equity in their RE anyway.

Burnabonian
Guest
Burnabonian

PS the people who are championing the infinite strength of camels’ backs are of course:

camel salesmen (new and used, natch)
camel loan salesmen
camel insurance salesmen
camel lawyers, and
camel breeders

crabman
Guest
crabman

Softy,

Yes, the side with the weaker arguments is more likely to resort to name calling. If I’m not mistaken, that is usually the bull side – “you guys are wrong, losers, bitter renters, doom and gloomers, etc.”

Most of the time bears use cap rates, price-to-income ratios, price-to-rent ratios, etc. to support the claim that Vancouver is in a bubble. Using one comment to argue that the bears are the name callers with a weak argument is pretty weak.

Softy
Guest
Softy

“you guys are wrong”

That is not name-calling. And it happens to be a correct statement of the reality that has persisted for 12 years.

Softy
Guest
Softy

“Most of the time bears use cap rates, price-to-income ratios, price-to-rent ratios, etc. to support the claim that Vancouver is in a bubble.”

Maybe you should stop. It is not done you any good at all. It has only resulted in 12 years of mistakes.

DisposableChrome
Guest
DisposableChrome
“you guys are wrong” That is not name-calling. And it happens to be a correct statement of the reality that has persisted for 12 years. There’s one thing wrong here, and I see it every so often so I just had to comment. Wrong for 12 years? REALLY? Are you saying that people in 2001 were all saying that house prices were overvalued and going to fall? This site began in 2006, did time travelers work some magic to make you come up with the 12 year number? Anyways let’s presume you actually meant wrong ‘since 2006′. By wrong I’m assuming you mean missed out on appreciation in the property market right? Because people calling for a correction saw it in 2008/2009. A major and quick correction. And since that time? Single family home prices are up, but condo prices?… Read more »
Pdub
Guest
Pdub

Softy, if you ask me to predict the outcome of a coin toss and I pick heads, but it turns out to be tails 12 times in a row, does that prove I should always predict tails?

ILoveCharts
Guest
ILoveCharts

“Softy, if you ask me to predict the outcome of a coin toss and I pick heads, but it turns out to be tails 12 times in a row, does that prove I should always predict tails?”

Yes. That coin is rigged. Just like this market is rigged.

Softy
Guest
Softy

“Are you saying that people in 2001 were all saying that house prices were overvalued and going to fall?”

I commented on this recently. Look it up. I gave the example of two towers completed in DT in 2000 and 2001 respectively and cited prices which show an increase of 65% in one year. So yes, lots of people were saying that prices were overvalued. After all, how is an increase like that justified on the basis of GDP growth, income growth, population growth, price to rent ratios, rent growth.

Softy
Guest
Softy

“Softy, if you ask me to predict the outcome of a coin toss and I pick heads, but it turns out to be tails 12 times in a row, does that prove I should always predict tails?”

?????

Analysis of an asset market is not random like a coin toss. After all, the big bank economists (who have taining and experience in this) have been right for 12 years. The amateur bears have been wrong. What accounts for the differing results?

They know what they are talking about and you guys don’t.

Now they say its a soft landing. I bet that they are right.

Van Coffee
Guest
Van Coffee

Softy –
You are right.
It is a soft landing.
Until it isn’t.
Now please STFU.
Regards,
VC

Best place on meth
Member
Best place on meth

Oh man, you guys are getting so trolled – keep ’em coming Shifty, this is hysterical stuff!

As for the 38K non-mortgage debt per person in BC, I would imagine it soon won’t be just the usual suspects defecating where they’re not supposed to.

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