Image

Household debt in Canada rises compared to income

by IBNS 23 Dec 2016, 08:01 pm

#Canada #householdincome #householddebt #debttoincome

Calgary Dec 24 (IBNS): A recently published report from Statistics Canada revealed that the ratio of household credit market debt to adjusted disposable income has shot up to 166.9 percent in the third quarter, up from 164.4 percent in the second quarter, according to media reports.

In other words, for every dollar in disposable income, Canadians owed $1.67  in credit market debt, including mortgages, other loans and consumer credit, the Statistics Canada report said.

 
Benjamin Reitzes, a senior economist of BMO Capital Markets, said that the half percent increase in debt ratio was well below seasonal norms and the smallest third quarter increase since 2000.
 
Reitzes said, "Even with  a more modest increase, the upward trend in the household debt ... continued unabated and we might start to see the ratio flatten out a bit in 2017 as the Vancouver housing market has cooled notably due to the foreign buyer's tax and the new mortgage rule should dampen activity modestly in 2017."
 
According to Statistics Canada, the higher ratio is attributable to adjusted disposable income increasing 1.0 percent. 
 
Statistics Canada reported that the amount of total household credit market debt stood at $2.004 trillion at the end of third quarter. Mortgage debt accounted for 65.5 percent of the total in the third quarter, up from 65.1 percent in the second quarter. 
 
In spite of increase in household debt,  the net worth of Canadian household rose to 2.5 percent in the third quarter to 10.33 trillion.
 
This was mainly attributed to 3.2 percent increase in financial assets by the way of increased value of investment funds shares particularly mutual fund units, life insurance and pension fund assets.
 
Non financial assets, mainly real estate, grew by 1.2 percent. 
 
The elevated household debt is likely to be a key vulnerability for the financial stability of Canadians, the media reported. 
 
(Reporting by Chandan Som )

Top Headlines

Related Videos
Video

Taste of America, Indian style

by India Blooms 09 Jul 2015, 02:37 am

Video

Love is the Drug

by Hannah Cornett 01 Jun 2015, 01:00 am

Video

Can India benefit from Kentucky coal?

by ibns 30 Jan 2015, 01:12 am

Video

Bollywood weekly round up

by ians 11 Aug 2014, 12:44 am

Related Photos
Rathayatra 2025: Glimpses of the preparation in north Kolkata's Tarak Pramanik Bari

Rathayatra 2025: Glimpses of the preparation in north Kolkata's Tarak Pramanik Bari

by Trans World Features 26 Jun 2025, 11:39 am

In images : Minister Kiren Rijiju wishes Shilpa Shetty on her birthday

In images : Minister Kiren Rijiju wishes Shilpa Shetty on her birthday

by India Blooms News Service 08 Jun 2025, 09:40 pm

In Images: PM Modi addresses rally in West Bengal in his four-state visit tour

In Images: PM Modi addresses rally in West Bengal in his four-state visit tour

by Trans World Features 29 May 2025, 09:45 am