Canadians Owe More Than $1.5 Trillion; Up 7.4% From 2013

“Canadians continue to pile on debt and now collectively owe more than $1.5 trillion, according to the latest figures from Equifax Canada.
The consumer credit rating agency says the level at the end of the third quarter was up 7.4 per cent from $1.409 trillion a year ago.
Nearly two-thirds of the total owed, or $985.1 billion, is mortgage debt. Excluding mortgages, the average debt held by Canadians stands at $20,891.”

– from The Canadian Press, 3 Dec 2014

7.4% p.a. Hmmm. Ever wonder where all that RE price inflation comes from?


All the best for the festive season, and wishing you all a very happy 2015.
Regular readers know this blog is dormant (even though the ideas expressed within are very much alive). We leave up the archives because they are, well, archives, and we leave the comments open for discussion (which is only moderated infrequently). Keep well everybody. -vreaa

34 responses to “Canadians Owe More Than $1.5 Trillion; Up 7.4% From 2013

  1. [NoteTollustriousEd/All: TheVeryVeryBest to and yours now and throughout the… YearOfTheGoat…]…

  2. This article annoys me given our own Bank of Canada posts official numbers at $1.8 trillion already, increasing +5% per year.

  3. The governor has spoken
    http://www.cbc.ca/news/business/stephen-poloz-says-up-to-30-overvalued-housing-big-risk-to-economy-1.2867184

    Interesting that the governor has said debt and real estate prices are a threat to the Canadian economy, after so many years of government policies at all levels that have created this very issue. If government action created the crisis, will they act to solve it. Or is the solution part of the the problem?

  4. “stephen-poloz-says-up-to-30%-overvalued-housing-big-risk-to-economy”
    Overvalued real estate is decoupled from housing bubble, so it seems.

    The Huffington Post Canada
    Posted: 09/23/2014
    As for a housing bubble, Siddall’s lack of concern was echoed by Bank of Canada Governor Stephen Poloz, who said Saturday that “we don’t see the housing market as particularly hazardous and we certainly don’t consider it to be a bubble.”

    CBC News
    Posted: Sep 24, 2014
    Trained Economist dismisses reports of a Canadian housing bubble
    Analyst is predicting crash that could cut home prices in half

  5. Whipmster~Kerthwhack

    Merry Cristmas to everyone!
    Please include this in your archives….
    An acquaintances anecdote, this is a true story:

    “I bought a house in 2003…
    in 2004 it went up…
    in 2005 it went higher…
    in 2006 it went higher…
    in 2007 it went higher…
    in 2008 it went higher…
    in 2009 it went higher…
    in 2010 it went higher…
    in 2011 it went higher…
    in 2012 it went higher…
    in 2013 it went higher…
    in 2014 it went even higher.”

    🙂

    • Formerly Know As...

      Good on you whipmaster, you got in right when prices decoupled from local income and really cheap credit was introduced. You gonna cash out soon?

      You seem to fault others for not buying back then, what happens if those people were mere teenagers then? Maybe they should have been thinking longer term, eh? Or maybe their parents should have bought them a starter home before they had a drivers license.

      • Whipmaster~Kerthwhack

        Hi, I do not own real estate.
        So I am not cashing out.
        I don’t fault others for not buying back then. My comments are directed solely at the rude individuals who mocked other people for buying property back then. If this doesn’t apply to you or other individuals , my sincere and unmitigated apologies for any misunderstanding.
        🙂

  6. 2014 December ~ the Russians are dancing to the tune of “Crouching Tiger, Hidden Dragon”

  7. pffft! meilleurs voeux de santé et de bonheur a toooooos … http://tinyurl.com/pqutn4t

  8. Oil + interest rates have driven much of this thing one way for years.

    Oil + interest rates will drive things the other way starting now.

    …and then eventually the cycle will reverse one again.

  9. Déjà vu in the Lotusland. At least the Brits are honest with the “foreign” components buried under oil gas mining or numbered corporations..

    @daily.mail.co.uk
    26 December 2014
    Ten foreign investors own sites for 30,000 homes: Plans fuel fears that Britons could be priced out of capital’s housing market
    * Ten developments in London reportedly being sold to overseas investors
    * Buyers see London as an investment – homes offered to foreigners first
    * Critics label homes ‘safety deposit boxes’ as many owners never live there
    * Investors are from Hong Kong, China, Malaysia, Australia, Singapore and Sweden

  10. (slightly off-topic, but what the hell…at least it doesn’t involve accordion music)

    Amanda Lang, tax-payer funded shill for Big Business…..

    http://canadalandshow.com/article/amanda-lang-took-money-manulife-sun-life-gave-them-favourable-cbc-coverage

    Not that I’m surprised or anything…..

    Hat-tip to Nemesis…..picked up on this topic from Nem’s post on Garth’s site….

  11. My breakfast chef finally sold his house in Burnaby for a little less than its original asking price (less than $2M), nearly 3 years to selling date. Patience paid off. Buyer is a small ham developer out to grab lands over 10,000 sq ft. and turning them into rooming houses for TWF and international students, until they are ready to pull down and build,
    Cash (Fiat currency) is no longer “king”. Time has changed. Central banks are no longer just ‘took care of money supply and acted as a lender of last resort’, rather it has turned into monstrosities maniputing and invading all global markets – real estate, equities, junk bonds, corporate debt, gold, other commodities, etc.
    If there is another rate cut coming soon followed by QE, many won’t be surprised. They have found the best way to hedge against the devaluation of currency backed investments is real estate.
    Unless you belong to the exodus batch of smart money, you’ll just have to figure out for yourself what works best for your hardearbed saving.

    • Whipmaster~Kerthwhack

      Exactly,” the best way to hedge against the devaluation of currency backed investment is real estate”…. I am in total agreement with the previous statement with the proviso that you are able to get in early enough, or at least do so with a big downpayment if the purchase is later in the cycle.

  12. One for the Archive:
    “Year of the Goat”, buyer pays $8 million for a house in Shaughnessy, $2 million above the asking price.
    http://tinyurl.com/lbl32q2 (google translate)
    http://tinyurl.com/nzog2nc (original Mingpao’s article of 2015 February, 19.

  13. 2015 already…time for a new blog posting!!!

  14. Vancouver

    4030 KASLO ST

    Listed at 1.09 March 5
    Listed at 1.29 March 13

  15. 4030 Nootka

    Listed at 875K February 17
    Changed to 999K March 10

  16. In the early days of this blog I pointed out that we cannot rely on a correction alone to solve the affordability crisis in this city.

    Most ignored this, saying it was just an exaggerated up cycle that will follow by a similarly painful bust. This is yet to materialize.

    In the years since our original discussions began, most cities in the GVRD now have housing costs of over a million dollars. Burnaby, East Van, Van West, North Shore, Richmond.

    The inner parts of the city – Van West I need not explain, and now East Van have gone parabolic. 1.5 million dollar sales are quite routine on the East Side.

    My point is this – given the most dire of crashes we have seen in the last decade – Phoenix, Miami, Ireland – this barely begins to scratch the surface of affordability in Vancouver.

    At a massive 50% haircut, East Van will fall to $700-800 thousand.
    Burnaby will be in the same range, Richmond, North Shore, etc.
    Van West? Still over a million!

    This problem extends far beyond an overpriced asset in need of a correction, and now I feel that more are willing to listen.

    This is an issue propagated by flawed City budgets, corrupt officials, and favourable treatment for deep pocketed developers. This is an issue of zoning. This is an issue of absurd building costs. And it still too remains an issue of land speculation.

    I hope that the city can reach a consensus on this – we need to up zone. We need to densify. We need to collectively realize that density does not have to equal pockets of high-rises constructed by a small handful of extremely wealthy developers.

    There are options – we need the public will to pursue them.

    Sadly, I still don’t think the will is there.

  17. Whipmaster~Kerthwhack!

    The sky may be gray,
    And the rain may fall down,
    It’s a lovelay day,
    for all but the clowns.
    The Basht’rds are gone,
    They’ve bitten the turf,
    And for the rest of us,
    it’s another great day,
    in the best place….
    …On Earf! 😆

  18. “Individual Chinese citizens could soon be allowed to invest as much as $1 million to $2 million overseas without regulatory approval.”

    “The relaxation on international capital flows for individuals would follow similar moves for companies that have helped spark a surge in overseas investment by Chinese corporations that reached a record $84.4 billion last year, according to the Heritage Foundation.”

    “In November last year Shanghai’s party chief announced that qualified individuals would soon be allowed to invest overseas directly without prior approval through the city’s free trade zone.”

    • “China Allowing More International Capital Flows

      Although no concrete plan has been laid out by the government for removing the existing rules that restrict individuals to bringing the equivalent of $50,000 per year into or out of the country, such a plan would fit with recent trends in China’s management of its capital accounts.

      While the country has traditionally kept tight controls on capital flows into and out of the country, it has gradually been loosening these measures, starting with corporate accounts.

      In late 2012, China began allowing its insurance companies, and later other corporates, to transfer at least part of their funds overseas without approval from the Ministry of Commerce.

      The result of the relaxation of restrictions on investment by the country’s insurers has fueled a surge in overseas asset acquisitions that has seen Chinese insurance companies aggressively acquiring hotels and other real estate assets in New York, London, Sydney, and other cities.

      Then in 2014, another regulatory body – the National Development and Reform Commission (NDRC) raised the ceiling on investments that would require its approval to $1 billion. Prior to that move, transactions for resource related investments of more than $300 million, or of more than $100 million in other industries, would have required NDRC approval.

      By allowing corporations to more freely invest overseas, overseas investment in real estate by Chinese companies increased by 46 percent to a record $16.5 billion in 2014, according to JLL.”

    • “Creating More Investment Options for Wealthy Individuals

      China began giving its private citizens greater access to overseas investments in a limited form last year, when it established the Shanghai-Hong Kong stock connect, that allows mainland individuals to purchase shares on the Hong Kong exchange, and vice-versa. There are plans for a similar link from Hong Kong to the Shenzhen exchange for later this year.

      While the exact nature of any new rules will have to wade its way through China’s bureaucracy, the apparent decision to allow private individuals still greater access to international markets, seems to signal growing confidence in the stability of the nation’s capital markets.

      By giving citizens the right to invest globally, China will also most likely remove some demand from its housing market, which had previously been seen as one of the most promising investment alternatives compared to the country’s casino-esque stock market or its close-to-zero-interest bank deposits.”

    • Don’t expect any bright sparks from wantings sidekick, krusty or steve. It ain’t happening.

  19. Apr 3, 2015 — This petition is about protecting current Canadian citizens—including recent immigrants—from the tsunami of international capital that is hitting Greater Vancouver’s residential real estate market, driving up prices, and lowering our standard of living as a result. The race or national origin of the investors who are purchasing real estate is irrelevant, and moreover, these investors have done nothing wrong—they are behaving in a financially rational manner within the rules that our government has set for them, and I wish them all the best. The onus to shape Canadian and British Columbian law is on us, not them. In short, any comments that are disrespectful to other cultures or nationalities will be deleted.

    https://www.change.org/p/premier-christy-clark-mayor-gregor-robertson-mayors-and-city-councillors-of-the-gvrd-restrict-foreign-investment-in-greater-vancouver-s-residential-real-estate-market?just_created=true

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