From a report from TD Economics, cited in the Vancouver Sun 9 Feb 2011 –
B.C. households are the most vulnerable in Canada to interest rate hikes or an economic downturn. B.C.’s household debt-to-income ratio is 160 per cent, far above the Canadian average of 127 per cent. B.C. is also the only province to have a negative savings rate, as every available dollar is directed toward mortgage and other debt or living costs.
Higher interest rates over the next few years threaten to leave as many as one in ten households in B.C. in a position of financial stress. The 10-per-cent figure is based on TD’s projection of gradual rate hikes from the current one per cent to three per cent by the end of 2012.
“On the plus side, rapidly-appreciating home prices in the province has left the debt-to-asset ratio — a metric of household leverage — below the Canadian average.”