Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
Canada has rung up the biggest household debts in the G7 as a share of disposable income through a decade where housing eclipsed business investment as a driver of economic growth, according to a paper Wednesday by analysts at the federal statistics office outlining other dangers from the recent jump in borrowing costs.
Consumer spending in particular on housing has been a main contributor to economic growth since 2015 outside of the pandemic while business investment has stagnated, Statistics Canada researchers wrote.
"Housing has been a double-edged sword -- critical for wealth creation for middle-class households, but also leading to imbalances between assets and debt," according to the paper. Household debt is 185% of net disposable income in Canada, ahead of the next highest G7 reading of 151% in the UK and 102% in the U.S.
Other risks include the household debt service ratio climbing to 15%, a surge in families extending mortgage amortization beyond 30 years, and 45% of mortgages resetting at higher rates this year and next, the paper said. "The current higher interest rate environment has implications for younger households with larger mortgages to pay off, as risks to socioeconomic mobility emerge with barriers to homeownership." (See: MNI INTERVIEW: Peaking BOC Rate Rekindles Housing-Royal LePage)
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.