A new report detailing a rise in unsecured credit is providing fodder for brokers concerned Ottawa has erred in focusing on mortgages.
Canadian debt loads grew at their fastest pace in two years during the summer, writes credit reporting agency TransUnion in its third quarter analysis, released Wednesday.
More specifically, the report finds that the average consumer non-mortgage debt jumped 4.6 per cent in Q3 2012, compared to the same period last year.
It did the same compared to this year’s second quarter, rising 2.1 per cent in the summer.
“It’s almost been two years and it’s the largest year-over-year increase we’ve had and I think it’s the largest quarterly increase we’ve had during that time period as well,” said TransUnion VP of Analytics Thomas Higgins.
The growth roughly coincides with Ottawa’s crackdown on mortgages, with new tighter rules introduced in July. Stricter lending guidelines for federal institutions were also brought to the market, creating a double whammy effect responsible, say critics, for the rapid de-acceleration home sales.
Brokers have largely panned federal government intervention as unnecessary and continue to call for focus on developing tighter regulations for unsecured credit.
Higgins is offering his own sort of warning about that rising debt.
“Debt’s outpacing us and continues to outpace us, so at some point in time there’s going to be a reconciliation,” Higgins said. “Hopefully it’s not drastic and hopefully it doesn’t hit everybody, but there’s going to be a correction somehow along the way.”