New Record $1.513 TRILLION in Canadian consumer debt

Just how fat can this debt pig get before it’s stomach explodes?

You thought this nation had impressive debt levels before? It’s now topped One and half trillion dollars and an astounding 65% of that is mortgage debt.

In one report, Equifax Canada said that “Canadian consumers have yet again tipped the scales setting a new benchmark of over $1.513-trillion in debt.”

That third-quarter figure marked an increase from $1.448-trillion in the second quarter and $1.409-trillion a year earlier, according to Equifax, whose numbers are based on more than 25 million unique consumer files.

Excluding mortgages, average debt held by Canadians has increased 2.7 per cent to $20,891.

The good news is that 27% of Canadians apparently don’t believe that a mortgage is debt, so we shouldn’t really even count that part.

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Westside Realtor
Guest
Westside Realtor

I suggest we are bumping up against our debt ceiling for this cycle.

Home buyers will be reminded that as prices decline the debt does not.

And decline in price houses shall.

HAM are sparse now. That is fact.

WSR = Admin
Guest
WSR = Admin

So WSR owns this blog. Hmmm

space889
Guest
space889

Given all the education about good debt vs bad debt and that only bad debt really counts, this is really not surprising.

When a good chunk of retirees plan to retire with mortgage, you know that personal finance is really in a deep hole.

MikeS
Member
MikeS

Seriously, who keeps upvoting WSR? It’s the same thing every day. He’s like a hobo with a JESUS SAVES sign at any intersection in Van.

Bull! Bull! Bull!
Guest
Bull! Bull! Bull!

just let in more monied peoples into the country to push up price of assets. it’s the candian way.

The Chinese economy just overtook the United States economy to become the largest in the world.

http://www.marketwatch.com/story/its-official-america-is-now-no-2-2014-12-04

MikeS
Member
MikeS

Anyways, I guess I’ll try and be constructive. Every few months I look at what my quick and dirty model says about US Interest Rates. It’s based on Inflation and Unemployment rates, using FED behaviour prior to 2008 to predict rates.

http://research.stlouisfed.org/fred2/graph/?g=TeX

Notice it predicted negative rates during the worst years of the recession, and now is finally proscribing positive rates (around 1.5-2%) after all these years. Yellen talks about slack in the economy, which means sustained low rates for a while longer. But this won’t last.

If anyone is interested, I can share the work I’ve done on Canadian rates as well. Sure enough *our* unemployment and inflation rates are much less important, and American rates are a primary driver.

Westside Realtor
Guest
Westside Realtor

Would love to see it Mike, thanks.

And remember…Jesus Saves:-)

Kidding (although I’m not making a call either way – I never want to offend the big man upstairs (whatever one’s beliefs are)).

My only call is this – Westside sfh market has been soft for months and I think something is brewing (ie that the HAM era is winding down and that this will have significant knock on effects).

Jmho

WSR

taylor192
Member

http://www.cbc.ca/news/business/debt-how-to-use-it-and-not-abuse-it-1.2859435

Some of the comments make me cry, especially about buying new cars or the quality of old cars. No wonder auto loans have gone into la la land.

patriotz
Member

@5: “The Chinese economy just overtook the United States economy to become the largest in the world.”

That’s at total real value of goods and services, i.e. it values the labour of a Chinese factory worker the same as his US counterpart, although the latter probably makes 20 times as much.

patriotz
Member

@5: “just let in more monied peoples into the country to push up price of assets. it’s the candian way.”

How come it doesn’t work for the Canadian stock market?

Loon
Guest
Loon

Check this out. I’ve done some back of the napkin math to try to get an idea of how much our fellow homeowners mortgages are worth.

For Greater Vancouver I’ve come up with this number: $461,542

I used the formula and variables below based off stats Can and other sources.

There are a few assumptions but I think this is a good start, comments and analysis welcome.

$ = (D / ((P x W – (z + y)) / M * R)) + (V – C)

Total Pop (P) 35,000,000
15-64 Working Age Group (W) 0.68
Age 55-64 (z) 4,393,305
Age 15-24 (y) 4,365,585
Household Members (M) 2.00
Renters to Ow(e)ners (R) 0.5
Mortgage Debt (D) 950,000,000,000
Canada Avg House Price (C) $419,699
Greater Van Avg Home Price (V) $628,600
Mortgage Debt household in Van ($) $461,542

Corruption
Guest
Corruption

Shoot me if this has been posted before, but I just stumbled on a very interesting article about how the Conservatives have changed the accounting rules twice in the past two years (apparently) to obfuscate exactly what’s happening with the deficit.

http://www.macleans.ca/economy/economicanalysis/the-mystery-behind-canadas-shrinking-deficit/

They really REALLY want to balance the 2015 budget so they can throw money around at the electorate just before an election, but the numbers just don’t add up. I wonder how much more creative they’ll get with the dropping oil and gas revenues.

BBB could be right again
Guest
BBB could be right again

Dec 4 (Reuters) – China stocks soared to their highest level since mid-2011 on Thursday, led by financial and oil shares, as the market’s rally on expectations of further economic stimulus measures showed no signs of losing steam.

space889
Guest
space889

@Corruption – Unfortunately the media don’t report and the average joe doesn’t care about the total debt level, which right away will tell you whether we are truly running a surplus or just a surplus in disguise.

Also unfortunate is that people don’t place debt repayment as a priority anymore. Basically the boomer generation are gifting their kids and grandkids the gift of debt that simply keeps on taking. It used to be that parents want to leave their kids in the best possible shape and not be a burden. That sense of parental care seems to have gone completely out of the windows now.

Boombust
Guest
Boombust

Go to today’s BNN and get Kevin O’Leary’s take on “old, crusty condos”.

Quite a good interview and accompanying article.

Bull! Bull! Bull!
Guest
Bull! Bull! Bull!

>How come it doesn’t work for the Canadian stock market?

because people don’t live in share certificates.

Corruption
Guest
Corruption

@Loon #11

I like the idea, but I think your starting figures are off.

http://www.cbc.ca/news2/interactives/housing-canada/

Says Vancouver’s 814K and the National price is 420, so the ratio goes from 1.5:1 to 2:1.

Loon
Guest
Loon

@17 Corruption

Thanks for the reference, I got my number from the good old HPI which includes condos, townhouses and SFD:

http://www.rebgv.org/home-price-index?region=Greater+Vancouver&type=all&date=2014-07-01

After plugging in your $814,000 I got a much scarier $646,942 – obviously these are averages – but this is nightmare territory.

dyugle
Guest
dyugle
I do not get the numbers in this article. From CMHC quarterly report they state that insurance and guarantees in-force total 546+404=950 billion in mortgages that they cover. They cover about 43.7% and 32.5% of the total outstanding mortgages respectively. So, 950 billion represents only 76.2% of the total outstanding mortgages. Thus, the total outstanding mortgages is 1.318 trillion. This is all according to their latest quarterly report on page 7. Did they forget to add the mortgages that are not backed or securitized by CMHC? If so, it just got worse. Additionally our Banks are missing their earnings estimates and CMHC has not expanded it’s balance sheet like it was supposed to. They planned to increases guarantees by almost 50 billion this year (see the year end report) and push the totals up to a trillion. They are still… Read more »
paulb
Member

New Listings 101
Price Changes 45
Sold Listings 100
TI:12994

http://www.paulboenisch.com

Bizznitch
Guest
Bizznitch
StupidityCheck
Guest
StupidityCheck

HAM is gone.

My office is swamped with calls from anxious offshore owners desperate to sell.

The writing is on the wall.

SC

Boombust
Guest
Boombust

Or, is the writing on your Ouija board?

Hard to figure out fact from fiction on this site most of the time nowadays.

StupidityCheck
Guest
StupidityCheck

Anyone else noticed that ecorealty was shut down by the good people at ReMax?

It was a great source of info. The real estate cartel doesn’t like sharing info, so it had to be silenced.

Tiger
Guest
Tiger
SnapStats® Inventory Sales Sales Ratio November $0 – 30 ,0 0 36 1 30.56% 30 ,0 1 – 40 ,0 0 9 41 41.41% 40 ,0 1 – 50 ,0 0 148 39 26.35% 50 ,0 1 – 60 ,0 0 101 23 2 .7 % 60 ,0 1 – 70 ,0 0 68 2 32.35% 70 ,0 1 – 80 ,0 0 32 16 50.0 % 80 ,0 1 – 90 ,0 0 3 18 54.5 % 90 ,0 1 – 1,0 0,0 0 2 5 2 .73% 1,0 0,0 1 – 1,250,0 0 47 1 23.40% 1,250,0 1 – 1,50 ,0 0 32 5 15.63% 1,50 ,0 1 – 1,750,0 0 20 2 10.0 % 1,750,0 1 – 2,0 0,0 0 16 2 12.50% 2,0 0,0 1 – 2,250,0 0 7 2 28.57% 2,250,0 1 – 2,50 ,0… Read more »
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