Tag Archives: credit

BC, debt, economy, mortgage, opinion, predictions, prices

Gentleman says “It’s not if, but when bubble bursts.”

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CCEC Credit Union is a vancouver-based lender.

Their CEO has the delightful name of “Ross Gentleman” and is interviewed over at BNN where he says that the Vancouver housing market is in a bubble and it’s not if, but when it bursts:

He says they are seeing a number of people ‘trolling’ lenders looking for financing on speculative purchases.

He calls the upper end of the market potentially more volatile and says that CCEC is committed to more conservative lending and tends to focus mainly on primary residences.

BC, Canada, debt, economy, opinion, predictions, rates

The problem with low debt levels

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We’ve seen lots of warnings about dangerously high consumer debt levels in Canada for years now, but here’s something new: Millennials lack of debt may be a sign of trouble.

Insolvency filings by consumers have started to edge higher after a long decline that began after the last recession. As has already been widely noted, the share of insolvencies accounted for by seniors is growing faster than any age group. What has not had much attention is the fact that the young-adult share is falling. Could this be a rare bit of good news for a cohort of the population that has been struggling financially?

Falling insolvencies among young adults definitely sounds good, but every silver lining must have a cloud right?  What’s the chicken-little take on this situation?

Hoyes Michalos recently produced an analysis called Joe Debtor that looked at people who make insolvency filings. The firm says 86 per cent of debtors ages 18 to 29 are working, but their average income is the lowest of all groups at $1,996 on a net basis per month. The average unsecured debt for the group is $32,229, also lowest of all age groups.

Personal loans are the biggest debt component at $11,841 for young adults making insolvency filings, followed by credit cards at $9,858. Almost 30 per cent have student debt, with the average amount owed averaging $3,716.

Their problems in today’s economy may have kept millennials from worse debt problems, Mr. Hoyes suggests. “If you haven’t been able to get a decent job, then it’s a lot more difficult to get into a huge pile of debt.”

In today’s debt-hungry world a lack of bankruptcies is indicative of a low income, how’s that for a bummer?

BC, Budget, Canada, data, debt, economy, mortgage, rates

Canadians deep in debt and getting deeper

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The Globe and Mail nicely sums up the current Canadian obsession with taking on household debt. This infographic has all the pretty charts related to the current situation in which current debt totals a record $1.8 trillion. Just over a trillion of that is Mortgage debt, with the other big growth seen in lines of credit and car loans.

One Trillion is a big number and it can be hard to visualize.  Here’s one way to put it into perspective:

If you spent $1-million every day, it would take you 2,740 years to spend $1-trillion.

Albertans carry the largest debt to income ratio followed by BC. It seems the nation loves debt, but the west loves it best.

Read the full article here.

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.

debt, economy, Open Topic

Friday Free-for-all! Luxury Credit.

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You made it to the end of another work week, and that means it’s time to do our regular Friday Free-for-all post here at VCI.

This is our 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:

–Price changes and credit (graph)
–Why so many doomers?
–High prices raise debt levels
–Perspective on foreign buyer levels
–3rd try for Versace in Vancouver
–

So what are you seeing out there? Post you news links, thoughts and anecdotes here and have an excellent weekend!