Don’t break open the bubbly quite yet, landlords. A new report from Equifax suggests more Canadian households are getting a handle on the kind of debt that keeps them renters instead of homeowners.
Growth in consumer debt fell 30 per cent in the second quarter, compared to a year earlier, reflecting the single biggest drop since before the recession.
“For the last couple of years we have seen almost double digit growth in some cases, it slowed down a bit last year, but we have never seen it slow down as much as we have (now),” said Nadim Abdo, VP of analytical services for Equifax Canada.
In real terms, consumer indebtedness – not taking into account mortgage debt -- climbed 3.1 per cent year-over-year in the second quarter. That’s down from the 4.4 per cent increase logged a year earlier, according to the Equifax quarterly trend report.
Economists are calling that improved financial footing the most conclusive indication to date Canadians are getting the message about the dangers of household debt levels, now averaging 152 per cent of income.
That rise was a key reason the federal government moved late last month to introduce tighter mortgage rules, a way of discouraging the at-risk consumers from taking on new mortgage debt.
The move is expected to benefit property investors as demand for rental units increases, taking rents with it.
That Canadians are now getting a hold on their spending is likely to salvage the homeownership dreams of many.
The report also found that high-interest credit card debt fell by 3.8 per cent in the second quarter, with bankruptcies down 4.5 per cent from the year-ago period.
“For the last couple of years we have seen almost double digit growth in some cases, it slowed down a bit last year, but we have never seen it slow down as much as we have (now),” said Nadim Abdo, VP of analytical services for Equifax Canada.
In real terms, consumer indebtedness – not taking into account mortgage debt -- climbed 3.1 per cent year-over-year in the second quarter. That’s down from the 4.4 per cent increase logged a year earlier, according to the Equifax quarterly trend report.
Economists are calling that improved financial footing the most conclusive indication to date Canadians are getting the message about the dangers of household debt levels, now averaging 152 per cent of income.
That rise was a key reason the federal government moved late last month to introduce tighter mortgage rules, a way of discouraging the at-risk consumers from taking on new mortgage debt.
The move is expected to benefit property investors as demand for rental units increases, taking rents with it.
That Canadians are now getting a hold on their spending is likely to salvage the homeownership dreams of many.
The report also found that high-interest credit card debt fell by 3.8 per cent in the second quarter, with bankruptcies down 4.5 per cent from the year-ago period.
Written by Vernon Clement Jones
250.650.4182
Angela Kroemer, AMP
Mortgage Professional
TMG The Mortgage Group Canada Inc.
TMG Sharie Marie Mortgage Team
1.250.650.4182
akroemer@mortgagegroup.com
www.KroemerMortgages.com
Your Mobile Mortgage Professional in The Comox Valley
Facebook Page https://www.facebook.com/#!/akroemer
365 Things To Do In Comox Valley https://www.facebook.com/cvmortgages
