Credit cards are displayed in Montreal. File photo by THE CANADIAN PRESS

CMHC says Canadians debt levels hit record highs at end of last year

TORONTO — Canadian household debt reached a record high at the end of last year even as mortgage activity slowed, the Canada Mortgage and Housing Corp. said in a report out Wednesday.

The debt to income ratio of Canadians hit a record high of 178.5 per cent in the fourth quarter last year as mortgage holders continued to take on non-mortgage debt.

The ratio increased as average monthly required payments rose 4.5 per cent compared with a year earlier, while disposable income rose only 2.5 per cent, the agency said.

Debt levels rose as average balances for credit cards and lines of credit grew at a faster pace than in 2017, especially in Vancouver, Edmonton and Toronto, it said.

Delinquency rates, however, remain low and stable, said CMHC senior market analyst Genevieve Lapointe in the report.

“Despite high debt levels, delinquency rates remain low and the number of highly indebted and more vulnerable consumers has decreased.”

The mortgage delinquency rate came in at 0.3 per cent, up 0.01 of a percentage point, while the share of mortgages held by those with credit scores below 600 continued to trend lower.

The total number of new mortgages issued in the quarter came in at 223,000, down 4.8 per cent from a year earlier.

The slower volume came as the market slowed and average prices fell on slightly higher interest rates, slower economic growth and stricter mortgage regulations.

The new mortgage regulations, which set higher stress-tests for would-be borrowers in an effort to slow the market, have come under criticism in some corners for making real estate less accessible.

The International Monetary Fund said Tuesday that Canada should maintain the regulations because household debt remains high, and a gradual slowdown in the housing market is desirable.

The average value of new loans in the quarter was 3.8 per cent lower than a year ago at $264,000 as house prices remain historically elevated, while the average value of all mortgages rose 3.1 per cent to $209,570 in the quarter, said the CMHC.

The agency said debt issues are increasing for older consumers as the share of mortgage holders 55 and older continues to grow. It said mortgage delinquency rates in the 65-and-above age group have been rising and have been the highest of all age grounds since late 2015, while still relatively low.

Just Posted

Deadline for cabinet to decide future of Trans Mountain expansion is today

OTTAWA — The federal government is widely expected to green light the… Continue reading

Statistics Canada reports manufacturing sales fell 0.6 per cent in April

OTTAWA — Statistics Canada says manufacturing sales fell 0.6 per cent to… Continue reading

China suspends imports from Canadian pork company

BEIJING — China will halt imports from a Canadian company after food… Continue reading

New tool launched to shine light on ethnic media coverage of election issues

OTTAWA — A new tool launched Tuesday could help voters learn what… Continue reading

Manslaughter trial hears recording of accused praying for forgiveness

CALGARY — A trial for a man charged in the death of… Continue reading

Pro-pipelines rally draws crowd to City Hall

Canadian Taxpayers Federation says Canada missing out on billions in revenue

The corporate winners and losers from the Toronto Raptors’ historic win

We The North mania spread across Canada as the Toronto Raptors created… Continue reading

Efforts continue to raise profile of New Brunswick sprint champion from 1900s

HALIFAX — A New Brunswick sprinter who achieved world-class success in the… Continue reading

Campaign to eradicate rodents puts other animals at risk

The bird was a female cardinal. It was on the ground and… Continue reading

Raptors announcer credited with calming massive crowd after shooting

TORONTO — The Toronto Raptors’ seasoned play-by-play announcer is winning widespread praise… Continue reading

Opinion: Throwing cold water on fee for calling firefighters

There’s never any upside to adversity. Whether it’s the loss of a… Continue reading

‘This is our story:’ Winnipeg General Strike commemorated on screen, stage

WINNIPEG — A moment in history that changed Canada forever is headed… Continue reading

Manslaughter trial hears recording of accused praying for forgiveness

CALGARY — A trial for a man charged in the death of… Continue reading

UN high commissioner urges redress as Canada responds to MMIWG inquiry

OTTAWA — Canada’s response to the conclusions of the inquiry into missing… Continue reading

Most Read