Credit-market debt including mortgages was 163.7 percent of after-tax income, up by 1 percentage point from the second quarter, Statistics Canada said Monday in Ottawa. That figure was balanced by ratios of debt to assets and debt to net worth, which at 17 percent and 20.5 percent remain little changed over the past several quarters.
Concerns about the obligations some families are taking on to buy homes, particularly in Toronto and Vancouver, led Finance Minister Bill Morneau to tighten mortgage lending requirements on Friday. Bank of Canada Governor Stephen Poloz has identified housing-market strains as a key risk to stability, a view he updates tomorrow in the semi-annual Financial System Review.
Credit-market debt rose 1.4 percent in the third quarter to C$1.89 trillion, faster than the 0.8 percent gain in disposable income.
The rise in debt loads comes as the cost of borrowing has dropped. The ratio of interest payments to disposable income fell to a record low 6.1 percent, Statistics Canada reported.
The aggregate figures on household debt have masked signs that home households have rung up even larger bills. Mortgage debt was at least 500 percent of disposable income in 10.8 percent of households in 2012, up from 3.4 percent of households in 1999, according to a paper published Wednesday by C.D. Howe Institute, a Toronto-based research group.
MBN
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