The Bankwatch

Tracking the consumer evolution of financial services

Asset value increases hide a rise in Canadian debt levels

Canadian’s balance sheets are improving following increases in real estate values and stock markets.  However in 2009 Canadians also increased debt through mortgages and loans, with the average ratio of household debt to income at 146.2%.

Household net worth up 1.6%, StatsCan | Financial Post

Canadian household net worth rose from October through December as individuals benefited from a rise in real estate and stock markets.

Household net worth growth

The value of families’ assets, such as houses and savings accounts, minus their liabilities increased 1.6% to $5.86-trillion in the fourth quarter, Statistics Canada said on Monday in Ottawa. Canada’s Standard & Poor’s/TSX composite index gained 3.1% in the period.

The ratio of household debt to income rose to 146.2% in the quarter from 145% in the previous three months, due to increased debts such as mortgages and car loans, Statistics Canada said.

Here is some selected data from Statscan detailing how Canadian debt levels relative to income.  The number that stands out is the last row – All credit as a percentage of income has grown nearly 7% (129.94% to 133.23%) over the last 5 quarters.

  Third quarter 2008 Fourth quarter 2008 First quarter 2009 Second quarter 2009 Third quarter 2009 Fourth quarter 2009
Household net worth per capita ($) 173,000 164,800 162,200 166,400 170,200 172,600
Household debt ($ billions) 1,321 1,346 1,355 1,384 1,408 1,432
Credit market debt ($ billions) 1,302 1,326 1,335 1,364 1,389 1,415
Consumer credit and mortgage liabilities to personal disposable income (%) 124.94 126.31 128.69 129.73 131.79 133.23


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Written by Colin Henderson

March 15, 2010 at 14:23

Posted in Uncategorized

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