(Black Press Media files)

(Black Press Media files)

Canadian households added record mortgage debt in late 2020: StatsCan

Canadians owed $1.75 for every dollar of household disposable income

Canadian households piled up a record amount of mortgage debt for the second quarter in a row amid low interest rates and high housing prices, Statistics Canada said Friday.

Hot real estate markets in many regions helped propel house prices higher, pushing demand for mortgage loans to $34.9 billion in the fourth quarter of 2020 — beating the previous high of $28.7 billion set in the third quarter, the agency said.

The growth in the value of real estate also pushed the net worth of homeowners higher, Statistics Canada said.

Residential real estate increased 3.3 per cent in value, the second consecutive quarter of strong growth, as investment in both new and existing homes remained robust, the agency said in its release.

National net worth overall increased to $357,955 from $343,172 on a per-capita basis, and by the end of the 2020, net worth had increased by more than a trillion dollars since the end of 2019, StatCan said.

Meanwhile, debt servicing and debt-to-income ratios saw an uptick in the fourth quarter but remained below pre-pandemic levels.

The household debt service ratio — measured as total obligated payments of principal and interest on credit market debt as a proportion of household disposable income — increased to 13.58 per cent from 13.18 per cent, Statistics Canada said in its release.

Still, the ratio was 9.8 per cent lower than its peak in the third quarter of 2019, the release said.

Household debt as a proportion of income rose to 175 per cent from 170.8 per cent, as debt grew slightly while household disposable income edged down, the agency said.

In other words, Canadians owed $1.75 for every dollar of household disposable income, up from $1.71 in the third quarter but still below the $1.81 Statistics Canada recorded at the end of 2019.

Canadians continued on a strong savings streak, marking the third consecutive quarter of double-digit savings rates, Statistics Canada said.

“The Canadian economy continued to recover, albeit at a slower pace, as households and businesses persisted in adjusting to the realities of the COVID-19 pandemic,” the release said.

“Canadians further reduced their reliance on government support measures as employee compensation regained additional lost ground.”

Yet even while government transfers and subsidies continued to wind down, declining for a second consecutive quarter, they still bolstered household savings and helped keep the savings rate high, the release said.

The increase in financial wealth helped Canadian stock markets recoup their losses from the market panic earlier in 2020, as Canadians looked for places to keep their excess savings, the agency said.

Meanwhile, the federal government continued to replace short-term borrowing with longer-term securities, issuing a record amount of bonds in the quarter, Statistics Canada said.

Canada’s overall national net worth, the sum of national wealth and Canada’s net foreign asset position, increased $602.9 billion from the previous quarter to $13,776.7 billion in the fourth quarter.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

A Google Earth image of a well site in Ponoka County from WellWiki.org.
Website ‘WellWiki.org’ makes accessing local well site information easy and accessible

U of A professor developed the database of well sites, including Ponoka County

Dr. Wayne John Edwards, 66, died Tuesday at Chinook Regional Hospital. (Cornerstone Funeral Home)
Lethbridge doctor becomes 7th Alberta health-care worker to die from COVID-19

Dr. Wayne John Edwards, who was 66, died Tuesday at the Chinook Regional Hospital in the southern Alberta city

Conservative leader Erin O’Toole holds a press conference on Parliament Hill in Ottawa on Tuesday, April 6, 2020. Top Tory leaders of past and present will speak with supporters today about what a conservative economic recovery from COVID-19 could look like. THE CANADIAN PRESS/Sean Kilpatrick
O’Toole to vote against Conservative MP’s private bill on ‘sex-selective abortion’

Erin O’Toole said he supports a woman’s right to choose and will personally vote against the private member’s bill

Doses of the Moderna COVID‑19 vaccine in a freezer trailer, to be transported to Canada during the COVID-19 pandemic. THE CANADIAN PRESS/Nathan Denette
Pfizer to increase vaccine deliveries in Canada as Moderna supply slashed

Moderna plans to ship 650,000 doses of its vaccine to Canada by the end of the month, instead of the expected 1.2 million

A empty classroom is pictured at Eric Hamber Secondary school in Vancouver, B.C. Monday, March 23, 2020. The Alberta government says schools in Calgary will move to at-home learning starting Monday for students in grades 7 to 12.THE CANADIAN PRESS/Jonathan Hayward
Calgary schools to shift to at-home learning for grades 7 to 12 due to COVID-19

The change, due to COVID-19, is to last for two weeks

A man wears a protective face covering to help prevent the spread of COVID-19 as he walks past the emergency entrance of Vancouver General Hospital in Vancouver, B.C., Friday, April 9, 2021. THE CANADIAN PRESS/Jonathan Hayward
COVID-19 spike in B.C. could overwhelm B.C. hospitals: modelling group

There are 397 people are in hospital due to the virus, surpassing a previous high of 374 seen in December

Ron Rauch and his wife Audrey are photographed at their home in Victoria, Friday, March 5, 2021. Their daughter Lisa Rauch died on Christmas Day 2019 when a tactical officer with the Victoria Police Department shot her in the back of the head with plastic bullets after barricading herself in a room that was on fire. THE CANADIAN PRESS/Chad Hipolito
B.C. families push for changes as special committee examines provincial Police Act

Solicitor General Mike Farnworth acknowledged the need to update the legislation last year

Major-General Dany Fortin, left, looks on as Minister of Public Services and Procurement Anita Anand provides an update on the COVID-19 pandemic, in Ottawa, Tuesday, Dec. 15, 2020. The Public Health Agency of Canada has set aside up to $5 billion to pay for COVID-19 vaccines. THE CANADIAN PRESS/Sean Kilpatrick
Canada negotiating contracts to secure COVID-19 booster shots for next year: Anand

Most of Canada’s current vaccine suppliers are already testing new versions against variants

(Government of Canada)
Liberal MP caught stark naked during House of Commons video conference

William Amos, in Quebec, appeared on the screens of his fellow members of Parliament completely naked

Health Canada headquarters in Ottawa. (Sean Kilpatrick/The Canadian Press)
Health Canada releases guidelines for reducing COVID-19 transmission at home

Improve indoor air quality by opening up your windows and doors, among other encouraged ventilation measures

Alberta Premier Jason Kenney updates media on measures taken to help with COVID-19, in Edmonton on Friday, March 20, 2020. Alberta is set to join three other provinces in exploring the feasibility of small modular reactors as a clean energy option. THE CANADIAN PRESS/Jason Franson
Four provinces to sign memorandum of understanding to explore small nuclear reactors

Alberta government said in August that it would enter into the agreement to help diversify its energy sector

Most Read