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'Canadian household debt exceeded the country’s gross domestic product for the first time as liabilities climbed to a fresh record relative to disposable income.
Household debt rose to 100.5 percent of gross domestic product in the second quarter from 98.7 percent previously, Statistics Canada said Thursday from Ottawa. Credit-market debt such as mortgages increased to 167.6 percent of after-tax income, from 165.2 percent in the first quarter.
The Bank of Canada and Finance Minister Bill Morneau have said the economy is at risk from record consumer debt burdens and a housing boom in Vancouver and Toronto. British Columbia’s government imposed a new 15 percent tax on foreign buyers which took effect last month and Morneau said last week he’s looking at whether more action is needed after a December move to tighten mortgage down-payment and lending requirements.
“Households are in an increasingly precarious position” and “should continue to be cautious” about adding debt, Laura Cooper, an economist at Royal Bank of Canada, said by phone from Toronto. Debt loads have climbed in an era of low interest rates and a stable job market, she said.'
Canada’s Household Debt Burden Is Now Bigger Than Its GDP - Bloomberg
Thoughts?
Household debt rose to 100.5 percent of gross domestic product in the second quarter from 98.7 percent previously, Statistics Canada said Thursday from Ottawa. Credit-market debt such as mortgages increased to 167.6 percent of after-tax income, from 165.2 percent in the first quarter.
The Bank of Canada and Finance Minister Bill Morneau have said the economy is at risk from record consumer debt burdens and a housing boom in Vancouver and Toronto. British Columbia’s government imposed a new 15 percent tax on foreign buyers which took effect last month and Morneau said last week he’s looking at whether more action is needed after a December move to tighten mortgage down-payment and lending requirements.
“Households are in an increasingly precarious position” and “should continue to be cautious” about adding debt, Laura Cooper, an economist at Royal Bank of Canada, said by phone from Toronto. Debt loads have climbed in an era of low interest rates and a stable job market, she said.'
Canada’s Household Debt Burden Is Now Bigger Than Its GDP - Bloomberg
Thoughts?
