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.
Bank of Canada Governor Stephen Poloz says it’s a ‘bad idea‘ to raise interest rates to combat imbalances in housing and consumer debt as that would only hurt manufacturers and the general economy.
“Housing activity is showing renewed momentum and consumer debt levels are high, so household imbalances appear to be edging higher,” he said. “But it is our judgment that our policy of aiming to close the output gap and ensuring inflation remains on target will be consistent with an eventual easing in those household imbalances.”
Changes in Canada’s population justify growth in the housing market, and Toronto, Vancouver and Calgary are the only three cities showing signs of overbuilding, Poloz said at a press conference.
Canada’s dollar extended declines after the speech and as crude oil, one of the nation’s main exports, fell below $80 a barrel. The currency fell 0.9 percent to C$1.1357 against the U.S. dollar at 3:15 p.m. in Toronto.
It may be just a crazy idea, but if the government actually wanted to do something about house prices and consumer debt, wouldn’t eliminating mortgage insurance do that without any change in rates?
Hey, you made it to the end of another work week, congratulations!
And here at VCI, that means it’s time for another Friday Free-for-all!
This is our regular end of the week news round up and open topic discussion thread for the weekend. Here are a few recent links to kick off the chat:
–Wish I never downsized to a condo
–Mortgage changes in 2014 budget
–Wealthy moving to Vancouver
–Ooops, maybe not
–Every city is just like Vancouver
–Consumer debt keeps swelling
–25 cent Crack pipe vending machine
–Next crisis not from emerging markets
–Craigslist aids crackdown on illegal suites
So what are you seeing out there? Post your news links, thoughts and anecdotes here and have a great weekend!
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.
Grab some coffee and some left-over halloween candy, it’s Free-for-all time!
This is our regular end of the week news round up and open topic discussion thread for the weekend.
Here are a few recent links to kick off the chat:
–Ready to count BOC out of rate hike?
–Consumer confidence falling
–‘red mitten’ benefit from winter games
–Flaherty to give market a talking to
–Housing Analysis construction activity
–Preparing for a stock market correction
–Can we have some accurate data?
–The foreclosure cup
–Where’s the next property bubble?
–Best places to retire
So what are you seeing out there? Post your news links, thoughts and anecdotes here and have an excellent weekend!