Average non-mortgage debt now over $40k

Betamax pointed out this article in the Vancouver Sun.

The average consumer debt load in Vancouver is over $40k, and that’s without mortgages on expensive property.

The average consumer debt in Vancouver, excluding mortgage, is the highest in Canada, according to a new report.

TransUnion’s quarterly analysis of Canadian credit trends, released on Wednesday, found that the average consumer’s total debt in the city in the third quarter of this year was $40,174. The second-highest was Calgary’s debt, at $37,920.

Nationally, the average consumer debt was $27,355.

Read the full article here.

Sort by:   newest | oldest | most voted
kenche
Guest
kenche

This mortgage specialist is feeling the pinch. Anyone want to help a broker out and take over his lease?

http://vancouver.en.craigslist.ca/rds/cto/4109307155.html

b5baxter
Member

Can anyone explain the total disconnect between Teranet and REBGV?
http://vancouverpeak.com/attachment.php?aid=538

mac
Member
mac
From the last thread to YVR, With all due respect, I believe there was a trigger in the US other than demand drying up. There were a lot of unusual, let’s call it, mortgages funded, including ARMs which had purposefully ridiculous built-in rate adjustments. A person with no money, no job could be signed up for an ARM @ 4% (for 110% of the value of the subject property) with the clause that it resets at 11% later on. The extra 10% acts as the offer no poor person could refuse. Now that we have hindsight, we know the same people pushing those mortgages on the poor would cross the hall, package them up with better products and take bets against them. That interest rate trigger and the aggressive marketing to these group were a part of the crisis. And… Read more »
Burt
Guest
Burt

My only point of contention would be the fact that much of that is likely new vehicle purchases.

These are often at very low interest, or in fact no interest. If you can secure a 0% loan for a new vehicle, its far preferable to paying cash and locking your capital in a depreciating asset.

To make it sound like people are walking around with 40k of debt on 22% credit cards is misleading.

That being said, don’t expect this trend to reverse anytime soon. Debt is a structural economic issue that won’t go away over night, particularly in North America.

Its in the interest of the ruling class to return to pseudo-feudalism, no better way to enslave people than with exorbitant debt loads.

This isn’t anything un precedented, consider it a return to normal.

patriotz
Member
Active Member

@4: ” If you can secure a 0% loan for a new vehicle, its far preferable to paying cash and locking your capital in a depreciating asset. ”

If you buy a car, you are locking your capital in a depreciating asset, no matter how it’s financed.

You have to pay the money back, not give the car back. And in the case of leasing, the depreciation is paid for by you in the lease payments.

George
Guest
George

Check out this advertisement masquerading as a news story on CBC about micro-condos being developed in Surrey. This “news” story even includes a promotional video from the developer.

http://www.cbc.ca/news/canada/british-columbia/new-surrey-mini-condos-have-foldaway-walls-beds-1.2425879

sunny day in vancouver
Guest
sunny day in vancouver

buy now or be priced out forever! opss, i forgot, bears had been priced out since 2004.

jesse
Member

Here is the press release/report from Transunion
http://newsroom-en.transunion.ca/article/?id=1781204

I’m no expert here, not having much “debt” myself, but what types of loans are included in the classes:
– Credit cards
– Lines of credit
– Installment loans
– Auto captives

Are any of these backed by, say, certain assets? Not saying this isn’t non-mortgage debt or anything, but I did see the term “line of credit” and that term can be used in all sorts of zany ways, so I need to ask the question.

chilled
Member
chilled

40K debt load? That’s insane. I have more than that in empty beer bottles lying around.

jesse
Member

“40K debt load? That’s insane”
Here is the breakdown for Canada as a whole:
Credit Cards $3,650
Lines of Credit $34,151
Installment Loans $24,107
Auto Captives $19,837

Most are backed, to varying degrees, by assets. Credit cards aren’t really backed by anything other than the threat of a ruined credit rating and/or bankruptcy. Auto captives I assume are backed by the auto, installment loans who knows, and lines of credit I am assuming at least in part are backed by durable assets like real estate and other such things. LOC makes up about 40% of the total, and the report did pat borrowers on the head for reducing their LOC exposure over the last year.

So it perhaps isn’t a surprise BC stands out on this report, if only because BCers carry more mortgage debt than the rest of the country.

Newcomer
Member
Newcomer

It’s not so much whether the asset is depreciating, as the spread between what you earn by leaving the money in the bank (or otherwise invested) and what you get by giving it all to the car manufacturer when you purchase (nothing).

That said, I doubt the average Vancouver punter is working the spread. I think they are just loading up on debt because they have more desire for goods and services than their disposable income allows.

Snake
Guest
Snake

B.C. heroin addicts launch Charter challenge against federal drug ban

http://globalnews.ca/news/964389/b-c-heroin-addicts-launch-charter-challenge-against-federal-drug-ban/

Snake
Guest
Snake

1)Burnaby’s Brentwood to be transformed into mixed-use community with 60-storey towers

http://globalnews.ca/news/965446/burnabys-brentwood-to-be-transformed-into-mixed-use-community-with-60-storey-towers/

2)Watch: Precedent setting case could serve as warning for condo owners across B.C.

http://globalnews.ca/news/965874/watch-precedent-setting-case-could-serve-as-warning-for-condo-owners-across-b-c/

3)Developer hopes fully convertible spaces in Surrey will attract first time buyers

http://globalnews.ca/news/964967/developer-hopes-fully-convertible-spaces-will-attract-first-time-buyers/

consumer
Guest
consumer

You guys are too funny.

I have a car loan at 0% for 48 months.

Why wouldn’t I take that??? I could have paid it off but choose to invest that money. Dow and S&P at record highs AGAIN!

Even Garth Turner has thrown in the towel. He now says in last nights post that bank of Canada not raising rates for a long time…

consumer
Guest
consumer

There’s many newly minted Canadian millionaires with this US stock rally over the last 5 years.

What politician would dare stopping that? Their head would be on a platter.

These new rich now will want the CDN dollar to go down…..so they can bring their gains back..

You can fight the herd and lose or you can join them and win. That is how democracy works… Majority gets their wishes.

Snake
Guest
Snake
5 years...
Guest
5 years...
Long time bear here, but I find it a little sad (and disconcerting) that realtors, mortgage brokers, and real estate analysts all called for 5-10 years of super low rates. At the time, all the bears here, including myself, bought the fear that 1981-82 could be repeated, and warned the ‘idiots’ against massive loans. People with no education, and a vested interest, actually called it right, while all the educated and prudent analysts, who followed economic fundamentals and groundtruthed their positions with historical and international examples, were fundamentally wrong… Good old Turncoat Turner was calling for massive rate hikes like in the 80s, and after 4 or 5 years of seeing the writing on the wall, he has finally caved (after much glee and commentary when rates went up, but silence when they eventually went back down over the past… Read more »
Many Franks
Member
@5 years…: What’s to be bitter about? Vancouver consumer debt has now crossed $40k; affordability is bouncing along the bottom despite ridiculously low rates; the rent/own ratio is bent way out of shape; and with the global economy uncertain and Flaherty eying the control panel yet again, it’s a tremendously uncertain time to have a big mortgage. So if you’re currently a renter in a decently stable spot, what’s not to like? My landlord has been dragging heels for 3 months figuring out what to do about a water leak just on the property side of the water line. That repair alone and property tax may well eat up half the years’ rent. Even for this landlord, who owns the property outright, it’s not looking so good to invest in home-ownership. Oh, did I mention that the landlord is the… Read more »
mac
Member
mac

5 years,

What are your thoughts on this:

http://www.ftportfolios.com/retail/blogs/economics/index.aspx

Watch Brian Wesbury discuss Janet Yellen. She’s a big believer in extended QE. Seeing more and more Wall St. types speaking out against ongoing QE. Where are those greener pastures. Possibly not in the US?

5 years...
Guest
5 years...
@5 years…: What’s to be bitter about? In my case, I have been a long time bear since 2005/2006. I almost bought a townhouse in South Surrey, but I rejected the bidding war mentality, conservatively looked at payments if interest rates went up, looked at what was taking place around the world (used to travel to Dubai, Ireland, and the US), followed my gut that this was not right.. I could have gone up the property ladder, gorged on cheap credit, overextend myself, and be in a position today of home ownership where at 30% correction would mean nothing….my equity would barely take a hit… I make 6 figures, but need to maintain that salary to be on par with a bloke making 40k or 50k, but who bought 7 or 8 years ago… I was financially prudent, and bet… Read more »
Many Franks
Member

@5 years…: If you’re earning >$100k and living like someone who’s making $50-60k less but happens to have a mortgage on a townhouse in South Surrey… well, a lack of home ownership might not be the problem.

Turkey
Guest
Turkey
@5 years…, In my case, I have been a long time bear since 2005/2006. I almost bought a townhouse in South Surrey, but I rejected the bidding war mentality, conservatively looked at payments if interest rates went up, looked at what was taking place around the world (used to travel to Dubai, Ireland, and the US), followed my gut that this was not right.. […] And yes, I have run the numbers….I am ‘behind’ I almost bought a SFH just down the street from my Strathcona rental, back in 2009 or so. We were beaten out in a bidding war by a genuinely nice young family. Remember what things were like in those days? Offers above asking, with no inspection? Since then, we’ve watched the trades trucks come and go constantly. The kitchen needed to go. Then, an under-height basement… Read more »
space889
Member
space889
For all those 0% car loans, I believe there is almost always a lower cash price which would change that 0% interest rate to something more like 5% to 7% interest rate. I have never heard someone able to purchase a car with loan at the same price as paying all cash. Also, with current low interest rate, a $40K debt with an average rate of 5% is still only $2000/year or just under $200/month in interest. I don’t think it will cause a big debt problems anytime soon unless there is a massive spike in unemployemnt or rise in interest rate / taxes. Face it, the last 5 years have seen savers subsidizing the borrowers and when thing finally breaks, savers will not be getting their money back, but the borrowers will at least enjoyed a nice living that… Read more »
space889
Member
space889

Regarding that Brentwood Town Center redevelopment story, what’s the crazy with outdoor shopping malls here?? It works in California and even Seattle as they are more cloudy than rain. But in Vancouver where it can rain for weeks on end, how is an outdoor shopping mall attractive to shoppers??? Getting wet while shopping and lugging shopping bags arounds, not fun!

Doomcouver
Guest
Doomcouver

I don’t think these have been posted yet:

Canada September housing prices flat, 29-month growth streak ends –
http://ca.reuters.com/article/businessNews/idCABRE99U0V820131114

wpDiscuz