(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.

Just Posted

North Okanagan business Hytec Kohler set up a COVID-19 vaccination clinic at the Spallumcheen plant Friday, May 14. (Jennifer Smith - Morning Star)
More than half of eligible adults in Interior Health vaccinated

Over 365,000 vaccine doses have been administered throughout the Interior Health region

Doses of the Pfizer coronavirus vaccine are seen being prepared on Wednesday, May 12, 2021, in Decatur, Ga. Hundreds of children, ages 12 to 15, received the Pfizer vaccine at the DeKalb Pediatric Center, just days after it was approved for use within their age group. (AP Photo/Ron Harris)
One death, 60 new cases of COVID-19 in Interior Health

The death is connected to the outbreak at Spring Valley long-term care in Kelowna

The first Pfizer-BioNTech COVID-19 vaccine dose in Canada is prepared at The Michener Institute in Toronto on Monday, Dec. 14, 2020. THE CANADIAN PRESS/Frank Gunn
One death, 39 new cases of COVID-19 in Interior Health

There are 484 active cases of the virus in the region currently

(Jonathan Kempe / Unsplash)
The Quest: Part 2, Adrian

The Student Journal showcases the work of the local high schoolers.

File photo
Police respond to reports of suspicious visitors in Vavenby

Clearwater RCMP responded to 54 calls for service this past week.

Daily confirmed COVID-19 cases reported to B.C. public health, seven-day rolling average in white, to May 12, 2021. (B.C. Centre for Disease Control)
B.C. preparing ‘Restart 2.0’ from COVID-19 as June approaches

Daily infections fall below 500 Friday, down to 387 in hospital

On Friday, May 14 at Meadow Gardens Golf Club in Pitt Meadows, Michael Caan joined a very elite club of golfers who have shot under 60 (Instagram)
Crowds at English Bay were blasted with a large beam of light from an RCMP Air-1 helicopter on Friday, May 14. THE CANADIAN PRESS/Marc Grandmaison
Police enlist RCMP helicopter to disperse thousands crowded on Vancouver beach

On Friday night, police were witness to ‘several thousand people staying well into the evening’

People shop in Chinatown in Vancouver on Friday, February 5, 2021. THE CANADIAN PRESS/Jonathan Hayward
Vancouver community leaders call for action following 717% rise in anti-Asian hate crimes

‘The alarming rise of anti-Asian hate in Canada and south of the border shows Asians have not been fully accepted in North America,’ says Carol Lee

Sinikka Gay Elliott was reported missing on Salt Spring Island on Wednesday, May 12. (Courtesty Salt Spring RCMP)
Body of UBC professor found on Salt Spring Island, no foul play suspected

Sinikka Elliott taught sociology at the university

The first Black judge named to the BC Supreme Court, Selwyn Romilly, was handcuffed at 9:15 a.m. May 14 while walking along the seawall. (YouTube/Screen grab)
Police apologize after wrongly arresting B.C.’s first Black Supreme Court Justice

At 81 years old, the retired judge was handcuffed in public while out for a walk Friday morning

Dr. Steve Beerman, of Nanaimo, shows off his Dr. David Bishop Gold Medal, awarded for distinguished medical service. (Karl Yu/News Bulletin)
Queen presents Vancouver Island doctor with award for global drowning prevention

Dr. Steve Beerman receives Royal Life Saving Society’s King Edward VII Cup at virtual ceremony

Former UFV Cascades wrestling coach Arjan Singh Bhullar is now the ONE heavyweight champion after defeating Brandon Vera via TKO in round two on Saturday in Singapore. (ONE Championship)
Former UFV wrestling coach wins MMA championship

Arjan Singh Bhullar captures ONE heavyweight title, first Indian origin fighter to achieve honour

Astra Zeneca vaccine waits for injection in a Feb. 3, 2021 file photo. A Langley man has become the second B.C. resident to suffer a blood clot following an injection. (AP Photo/Frank Augstein)
B.C. man required emergency surgery after AstraZeneca vaccination

Shaun Mulldoon suffered ‘massive blood clot’ after jab

Most Read