OTTAWA — Canadian households piled up a file quantity of mortgage debt for the second quarter in a row amid low rates of interest and excessive housing costs, Statistics Canada mentioned Friday.
Sizzling actual property markets in lots of areas helped propel home costs increased, pushing demand for mortgage loans to $34.9 billion within the fourth quarter of 2020 – beating the earlier excessive of $28.7 billion set within the third quarter, the company mentioned.
The expansion within the worth of actual property additionally pushed the web value of house owners increased, Statistics Canada mentioned.
Residential actual property elevated three.three per cent in worth, the second consecutive quarter of robust progress, as funding in each new and current properties remained sturdy, the company mentioned in its launch.
Nationwide internet value general elevated to $357,955 from $343,172 on a per-capita foundation, and by the tip of the 2020, internet value had elevated by greater than a trillion dollars because the finish of 2019, StatCan mentioned.
In the meantime, debt servicing and debt-to-income ratios noticed an uptick within the fourth quarter however remained under pre-pandemic ranges.
The family debt service ratio – measured as complete obligated funds of principal and curiosity on credit score market debt as a proportion of family disposable revenue – elevated to 13.58 per cent from 13.18 per cent, Statistics Canada mentioned in its launch.
Nonetheless, the ratio was 9.eight per cent decrease than its peak within the third quarter of 2019, the discharge mentioned.
Family debt as a proportion of revenue rose to 175 per cent from 170.eight per cent, as debt grew barely whereas family disposable revenue edged down, the company mentioned.
In different phrases, Canadians owed $1.75 for each greenback of family disposable revenue, up from $1.71 within the third quarter however nonetheless under the $1.81 Statistics Canada recorded on the finish of 2019.
Canadians continued on a powerful financial savings streak, marking the third consecutive quarter of double-digit financial savings charges, Statistics Canada mentioned.
“The Canadian financial system continued to recuperate, albeit at a slower tempo, as households and companies endured in adjusting to the realities of the COVID-19 pandemic,” the discharge mentioned.
“Canadians additional lowered their reliance on authorities help measures as worker compensation regained further misplaced floor.”
But even whereas authorities transfers and subsidies continued to wind down, declining for a second consecutive quarter, they nonetheless bolstered family financial savings and helped hold the financial savings fee excessive, the discharge mentioned.
The rise in monetary wealth helped Canadian inventory markets recoup their losses from the market panic earlier in 2020, as Canadians regarded for locations to maintain their extra financial savings, the company mentioned.
In the meantime, the federal authorities continued to switch short-term borrowing with longer-term securities, issuing a file quantity of bonds within the quarter, Statistics Canada mentioned.
Canada’s general nationwide internet value, the sum of nationwide wealth and Canada’s internet international asset place, elevated $602.9 billion from the earlier quarter to $13,776.7 billion within the fourth quarter.
This report by The Canadian Press was first printed March 12, 2021.
The Canadian Press