Canadian household debt has reached $2.28 trillion in total as of March, with mortgage payments accounting for a significant slice of the growth, according to data from the Bank of Canada.
This represented a 0.44% uptick from the February level, and a 4.6% increase from March 2018. Government-mandated mobility restrictions to prevent the further spread of COVID-19 might have played a role in these growth segments during that month, observers said.
Outstanding mortgages comprised $1.64 trillion of this volume, rising by 0.49% monthly and 5.3% annually. Mortgage payment growth has reached its highest level since November 2017, Better Dwelling reported.
Meanwhile, consumer credit represented $638.56 million of the March total, up 0.31 monthly and 2.7% annually.
The coronavirus pandemic is shaping up to be a worse economic and housing shock than anything encountered before, and it is likely to aggravate the already-heated conditions surrounding Canada’s household finances.
A late March survey commissioned by Postmedia Inc. found that 47% of Canadians will not be able to afford the current work stoppages as they have neither back-up funds nor benefits. Another 23% said that they are afraid of losing their jobs.
“The income level of these people is simply not going to be there, so the question is how can governments respond to it,” said pollster John Wright. “People are now going to start evaluating what this all means to them personally.”