Mortgages accounted for much of the annual increase in consumer debt as of the end of Q3 2019, according to Equifax Canada.
On average, Canadians each owed around $72,500 in debt at the end of September, with the amount increasing by 2.1% annually.
The mortgage market imparted the majority of this upward movement, with its 4.5% year-over-year growth to $1.32 billion. Overall consumer credit stood at $1.966 billion, up by 4.1% annually.
“Consumers finally seem to be tempering their appetite for credit with slowing growth in non-mortgage debt in the last two quarters,” Equifax Canada vice president of data and analytics Bill Johnston said. “That is a positive sign, as other indicators suggest more people are challenged with their current financial situation.”
“The slower growth in non-mortgage credit is actually a positive sign, as consumers are starting to get their balance sheets in order,” he added. “With the Bank of Canada on hold, this is a good opportunity for consumers to reset and prepare for future interest rate increases.”
Financial anguish has become an all-too-common phenomenon, with 45% of those surveyed by a recent Manulife Bank analysis admitting that their spending is growing faster than their incomes.
Non-mortgage delinquencies of 90 days or more went up by 9.7% year-over-year to 1.15%, which was the highest Q3 reading since 2012.
A similar trend is apparent in mortgage delinquencies, which grew by 6.7% annually to 0.18%. The increase was propelled by more delinquency in Ontario (up 17.6%), British Columbia (up 15.6%), and Alberta (up 14.8%).
“While the uptrend in delinquencies has been relatively modest, it has been masked by a significant increase in consumer bankruptcies,” Johnston noted. “Consumer proposals, where a licensed insolvency trustee negotiates debt repayments, remain on a strong rising trend and that is coming at the expense of traditional delinquencies.”
