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Household Credit Growth Sees Far Less Impulse Than Last Year [1/2]

CANADA DATA
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  • Today’s household credit data for September showed continued steady monthly growth, equating to 2.9% both annualized over the latest three months and in Y/Y terms, having pulled back from particularly strong growth rates in 2H21-2022.
  • Mortgage lending remains stronger at 3.5% annualized over three-months for an acceleration from 2% in Jun, and the Y/Y at 3.1% Y/Y.
  • Offsetting this is non-mortgage lending, which has come under renewed pressure recently with a three-month rate of 1.1% annualized (lowest since mid-2021) and 2.4% Y/Y.
  • Overall household credit is estimated to be equivalent to just over 100% GDP, having hovered around this level since 2022 and also through 2016-19.
  • When it comes to servicing this debt, data are only available to Q2, which if we recall showed overall household debt servicing worth almost 15% of disposable income for back near pre-pandemic peaks.
  • Again, this belied a split between mortgage and non-mortgage servicing, with mortgage debt hitting fresh cycle highs in 1H23 but the relative prudence in non-mortgage lending through the pandemic (as seen in the lending data) resulting in relative debt servicing costs at levels last seen in the early 2000s.
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  • Today’s household credit data for September showed continued steady monthly growth, equating to 2.9% both annualized over the latest three months and in Y/Y terms, having pulled back from particularly strong growth rates in 2H21-2022.
  • Mortgage lending remains stronger at 3.5% annualized over three-months for an acceleration from 2% in Jun, and the Y/Y at 3.1% Y/Y.
  • Offsetting this is non-mortgage lending, which has come under renewed pressure recently with a three-month rate of 1.1% annualized (lowest since mid-2021) and 2.4% Y/Y.
  • Overall household credit is estimated to be equivalent to just over 100% GDP, having hovered around this level since 2022 and also through 2016-19.
  • When it comes to servicing this debt, data are only available to Q2, which if we recall showed overall household debt servicing worth almost 15% of disposable income for back near pre-pandemic peaks.
  • Again, this belied a split between mortgage and non-mortgage servicing, with mortgage debt hitting fresh cycle highs in 1H23 but the relative prudence in non-mortgage lending through the pandemic (as seen in the lending data) resulting in relative debt servicing costs at levels last seen in the early 2000s.