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.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

New highway to B.C. proposed

The Howse Pass shortcut to British Columbia is worth taking another look… Continue reading

Red Deer RCMP execute search warrant

Heavy police presence on Nash Street

Health care coalition calls on government for pharmacare funding in next budget

OTTAWA — A coalition of 150 health care organizations and non-profits is… Continue reading

Telus and affiliates tell customers they’ve already met Liberal rate-cut pledge

OTTAWA — One of Canada’s major mobile service providers appears to have… Continue reading

Five things to watch for in the Canadian business world in the coming week

TORONTO — Five things to watch for in the Canadian business world… Continue reading

Your community calendar

Feb. 6 A Perogie Supper is being held Thursday, Feb. 6 from… Continue reading

Reader’s opinion: Here’s how Premier Kenney can build a stronger Alberta

Apparently, the UPC government has decided that most seniors should pay more… Continue reading

Canadian snowboarder Blouin wins World Cup gold in women’s slopestyle

CALGARY — Laurie Blouin couldn’t wipe the smile off her face after… Continue reading

Alberta skip Laura Walker’s change of heart gets her to first Hearts

MOOSE JAW, Sask. — Laura Walker wasn’t going to curl with a… Continue reading

Catherine Reitman says there’s a ‘real hunger’ for shows like ‘Workin’ Moms’

TORONTO — Some six years ago, when Catherine Reitman was creating her… Continue reading

Museum’s Rembrandt knockoff turns out to be the real thing

ALLENTOWN, Pa. — Thanks to modern technology and some expert detective work,… Continue reading

Woman loses 50 pairs of shoes after boyfriend accidentally donates them to thrift store

Cassandra Converse can’t wait to go shoe shopping. Last month, Converse’s boyfriend… Continue reading

RDC Queens fall in double OT to MacEwan University Griffins

Griffins 4 Queens 3 (2OT) The RDC Queens managed to salvage a… Continue reading

Most Read