Household debt climbs to record levels, driven partly by hot real estate markets
OTTAWA — The amount Canadians owe compared with how much they earn hit a new record in the second quarter, driven in part by the country’s hot housing markets.
TD Bank senior economist Leslie Preston said low interest rates have made borrowing more attractive, especially for homebuyers, and predicted the debt ratio could continue to trend a little higher in the next few quarters.
“We think there’s still a fair bit of momentum in Toronto’s housing market and Toronto is just such a huge share of Canada’s overall housing market that we do think this ratio could tick up,” she said Thursday.
The ratio of household credit market debt to disposable income climbed to 167.6 per cent in the second quarter compared with 165.2 per cent in the first quarter. The increase means households owe about $1.68 in credit market debt for every dollar of disposable income.