More money, more problems

Net worth and debt level are rising in Canada. Both are attributable to the real estate market which is starting to lose its luster.

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  • Household net worth increased by 1.4% in the fourth quarter, thanks partially to investment gains, Statistics Canada said Friday. But household debt levels also surpassed record levels reaching 165% of disposable income. Still, the pace at which Canadians are piling on debt is slowing, suggesting government efforts to caution the public about borrowing too much at low interest rates are working. By the end of the December, mortgage debt in Canada exceeded $1 trillion for the first time.
  • Meanwhile, CREA said Friday that the housing market continued to cool in February with both transactions and prices down in the month compared to the same period last year. The association also revised it’s 2013 estimates downward saying it expects prices to fall an average of 0.2% to $362,600.

One comment on “More money, more problems

  1. You are confusing causation with correlation. Simply put, debt levels are plateauing due to debt maintenance costs pushing at the upper level of incomes.

    In the case of these amazing debt levels, the current fiscally wreck less government is the cause of the high level but deserves no credit in these levels finally reaching their income level asymptote.

    Reply

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