Canada, debt, economy

Household debt is growing faster in Greece than in Canada

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Most everyone knows that Canadians hold a lot of household debt now.  Debt levels have been growing for years, but it still seems surprising that Canada is second only to Greece in household debt growth.  This according to a report from the McKinsey Global Institute who adds our country to a list of seven others at risk from high debt levels.

The report found household debt in Canada had risen to 155 per cent of income in 2014, up from 133 per cent seven years earlier. That’s a slightly lower estimate than the Bank of Canada’s, which estimates household debt at 162.6 per cent of income, a record high.

Only Greece saw a larger increase in household debt since the Great Recession, rising 30 percentage points. The U.S., by comparison, has seen household debt levels decline by 26 percentage points, relative to income, in that time. U.S. household debt levels have been largely falling since the country’s housing bubble burst during the last recession.

Read the full article here.

You’ll be relieved to know that even though our debt growth has been 2nd fastest, we still don’t have the highest debt levels. That prize goes to Denmark and Norway.

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space889

We have relatively good social safety net which allows people to take on more debt. As well, our population are relatively young and are in prime spending/debt accumulation period of their lives. The same goes for Norway, Denmark, etc which are all fairly socialist countries with a traditon of home ownership.

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space889

We have relatively good social safety net which allows people to take on more debt. As well, our population are relatively young and are in prime spending/debt accumulation period of their lives. The same goes for Norway, Denmark, etc which are all fairly socialist countries with a traditon of home ownership. Swiss, Germany apparently don’t have a big ownership society. Rather most of their housing stocks in the cities seem to be big apartment buildings owned by pension funds/state, rather than condo developments. Since you can’t borrow your rent, this would automatically lower their total personal debt level, assuming all else equal (eg. they don’t borrow for other consumptions like Iceland, Latvia, Greece, etc). In US, most people live in fear of a big medical bill, even with insurance as insurance companies have very creative ways and lawyers to deny,… Read more »

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space889

@Lurker – we also have relatively good social safety net which allows people to take on more debt. As well, our population are relatively young and are in prime spending/debt accumulation period of their lives. The same goes for Norway, Denmark, etc which are all fairly socialist countries with a traditon of home ownership. Swiss/Germany apparently don’t have a big ownership society, rather most of their housing stocks in the cities seem to be big apartment buildings owned by pension funds/state. Since you can’t borrow your rent, this would automatically lower their total personal debt level, assuming all else equal (eg. they don’t borrow their brains out for other consumptions like Iceland, Latvia, Greece, etc). In US, most people live in fear of a big medical bill, even with insurance as insurance companies have very creative ways and lawyers to… Read more »

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Tiger

tedeastside Says: February 12th, 2015 at 1:24 am 117

the list came out of BCs top employers …and guess who is #1, the future looks bright for vancouver with 1-800 got junk being its top employer.
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Each employer that were selected, they posted in their website in alphabetical order not the way you describe.Ted you are so fucking dumb plus your reading comparison sucks.

Dont believe me here it is for everyone to see

http://www.canadastop100.com/bc/
http://issuu.com/ct100./docs/bc-top-employers-2015?e=14200235/11189387

Why are u posting incorrect information which has no substance at 1:24 am on a workday?

TED U DON’T HAVE A LIFE OR A JOB UR A FUCKING LOSER.

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trackback

[…] tedeastside either hates Vancouver or he wants other people […]

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Lurker

@119 Nations that borrow more tend to be producers of things. Their production capabilities allow them to borrow against their ability to produce marketable goods. In our case we have an abundance of natural resources. A country with a different economy can’t have as high debt levels e.g. Switzerland and does well by buying money (debt) off others and using that to make a profit. Also don’t forget that debt numbers don’t have to match capital. If I lend you a dollar and you lend it to Frank then there are 2 dollars of debt on the books but 1 dollar would wipe it all out. Debt in itself isn’t a bad thing. It’s just the ability to manage it. People that look at a number on a debt clock and say ‘it’s bigger than it was at time X… Read more »

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Bull! Bull! Bull!

ontario transplants are so obnoxious. if a housing crash sends them packing, i welcome it.

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Marco

Wow, That’s rubbish.

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bullwhip29

just poking my head in for a second

fwiw, some interesting reading…(genworth now controls 30% of cdn mortgage insurance mkt); i am guessing taxpayers’ “investment” in cmhc not doing especially well at the moment

http://www.theglobeandmail.com/report-on-business/economy/genworth-warns-of-rising-losses-on-mortgages-from-oil-sensitive-alberta/article22942576

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chinoria

Congrats Mr Harper you have sold our soul. Even well known money countries like Switzerland and Singapore require residency status and taxation to allow property purchases except in certain specified areas so as not to compete with locals.

But not here. Everything is for sale to any sweat shop owner or money launderer or nephew of a leader.

Come buy and pay tax if you so chose and don’t if you don’t want to.

Our services are for your use. We are so desperate to take money that we attach no conditions at all

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88

@116

They are working and earning income. Just not in this country.

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patriotz

@118:

Keep in mind that it’s the growth in household debt/income (slope of the curve) over the last decade that’s been higher in Greece than Canada. But the actual debt/income figure today in Greece is only half that of Canada and lower than almost all other countries graphed. Look at the graphs in the linked article.

Also compare the left and right hand graphs. Left hand graph – declining debt/income. Why? Already had an RE bust. Right hand graph – still rising debt/income. Why? No RE bust – yet.

Greece is really the odd man out in the right hand graph – they never had much of an RE bubble, their economic problems were due to direct government borrowing.

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johnberk

I still haven’t found any coherent explanation of why some nations tend to borrow more money than the others. Especially when Canada, Denmark and Norway score the highest household levels in the world. We can argue that it is due to the RE market, which is still quite active and growing, especially in Vancouver and Toronto (for some strange reason). Maybe it is the confidence in the households and in their ability to repay their debts. In Greece, however, the situation would be very different. Young people only scarcely buy new housing, and they don’t have enough financial assets (it’s hard without having a job) to enter the market. So their spending would probably be on consumer electronics or maybe cars.

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tedeastside

the list came out of BCs top employers …and guess who is #1, the future looks bright for vancouver with 1-800 got junk being its top employer,

vancouver…name something good about it!!!…YOU CAN’T

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Oracle

@bull bull

“i should modify my previous statement. in vancouver, the servant class also buys condos and townhouses. sfh are for the master class.”

–> not master class. It’s the non working class with wealth/assets. They are not taxed. The working salaried class fools are taxed. Biggest scam in earth. But the fools take it.

Taxes should be based on wealth. Not salaried income.

There you have it. The working class vs the non working class.

It’s always been like that throughout history. Look it up.

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Oracle

To Admin:

Can you stop the hiding of a post if it’s down voted too many times? Seems like someone’s multiple voting.

I know it’s unpopular here but Vancouver is in the big leagues now. Show me a place in the world where an average home price has gone from $2 million to $1 million.

I’m sorry guys and I know it’s unaffordable for the working class but it’s not going down here like that short of a revolution.

to all the downvoters: a $550,000 lot will soon be worth $1 million. Still time to get in. Not pumping the market. They are not making any more 6000 sq ft lots anymore.

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Oracle

I’ve got $1 Million cash to put towards a home. Thinking I sold at the wrong time as the market is rising.

What’s the best place to get in for a detached? I was now thinking panorama ridge in surrey. The last bastion of estate lots can be had for around $1.5 million.

Easily go for $5 Million in 10 years time as we have more than 500,000 rich people move here from Asia.

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@110 would-be buyer

@110 Great post.

500 SFH Westside (most desirable)!! Only 262 SFH (less desirable), only 55 New West??

It says that Vancouver doesn’t add up.

With the most desirable areas having a listings explosion, and the least disable having the opposite. Unheard of. It says that cheap credit or incomes just can’t afford to purchase on west side.

Huge potential red flag for Eastside down the line surely? Because if Westside can’t find any buyers at current prices..

Name one other City in the world where this scenario is playing out. The well-incomed always usually gravitate to the best areas.

What a mess.

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Canis

Corner lot on a busy street (Dunbar). They’re looking for someone to gamble on rezoning and densification. This was going on for similar properties in 2012-13. Some of those in my neighborhood never sold. To repeat the question posed above to Paul about those places in North Van: Inspections? For “prime building lots”?

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chinoria

This is what $2.5 Million buys you in Vancouver

http://www.40listings.com/REBGV/V1103943/3492-w-37th-av-vancouver-west-dunbar-v6n2v6

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would-be buyer

I find it odd that there are over 500 SFH for sale on the west side and prices are firm or have risen in the last year. With that much inventory you would expect west side house prices to soften. Are there that many buyers in the market for $2M+ houses? There are only and 262 SFH for sale on the east side and 55 SFH for sale in New Westminster, where I have been looking lately. There is basically no inventory of SFH under $1M that you would actually want to live in. Somethings got to give here…

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Shut It Down Already

Paul, thanks for clarifying how the subject-free offers are arranged. Pre-inspection obviously makes infinitely more sense than no inspection!

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Lurker

@106 I want to believe that but people have called Vancouver overpriced for a few years now and the prices continue to climb.

It’s easy to say ‘interest rates rising will cause prices to come down’. Well duh but they just defied odds and dropped. So what are the chances they rise again soon?

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southseacompany

@#Randy #106

Couldn’t find any choice recent quotes from Mr. Somerville, but here’s anther favourite, Barbara Yaffe, passing on Michael Geller’s advice;

“Barbara Yaffe: Creativity, flexibility essential for Vancouver housing market.” Vancouver Sun.

http://www.vancouversun.com/business/Barbara+Yaffe+Creativity+flexibility+essential+Vancouver+housing+market/10805894/story.html

“Geller also floated some unusual financing options for newcomers to the market. A buyer could perhaps purchase half the value of his housing unit while paying rent on the other half, to be held by a non-profit organization or community land trust. The buyer slowly could increase his equity share as he becomes able to afford it.

“Or, why not allow a low-risk borrower to get others to invest in his downpayment, with a legal agreement that those lenders would receive an enhanced payback reflecting the property’s appreciation whenever it is sold?”

Gotta love that last one. Investing in low-risk mortgages. Sounds vaguely familiar.

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Randy Randerson

@104

I wonder, if the same questions were posed to Turd Somerville, would the answers be “No, I do not see any correction with Canadian housing market, nor do I see any over-valuation. The IMF is run by a bunch of idiots anyway. In fact, I predict Vancouver’s RE price will go to the moon!”

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