Housing bubble talk shifts to autos
Credit ratings agency Moody’s is warning of a bubble in Canada, but it’s not home loans this time. The firm’s report raises concern over auto loans suggesting that it could become a big issue for consumers and banks. Moody’s says that the total value of car loans was 4 times higher last year than in 2007, worth a whopping $64 billion. The report notes that at 20 per cent growth it’s more than double the growth in mortgages in that same period. With easier-to-get auto loans, Canadians have been buying more expensive vehicles but Moody’s warns that defaults are already higher and a rise in unemployment or home loan rates could push more into problems.