It was a good run while it lasted.
With Canadian home prices declining in many markets and mortgage rates pushing up monthly costs for property owners, RBC says ?a golden decade for household wealth creation is coming to an end.?
Rock bottom interest rates, population growth and supply shortages in some markets propelled the Canadian housing market to new heights, but a recent report from Statistics Canada indicates household net worth is now declining. Household net worth dropped 2.8 percent to $10.7 trillion in the fourth quarter.
It was a good run while it lasted.
With Canadian home prices declining in many markets and mortgage rates pushing up monthly costs for property owners, RBC says ?a golden decade for household wealth creation is coming to an end.?
Rock bottom interest rates, population growth and supply shortages in some markets propelled the Canadian housing market to new heights, but a recent report from Statistics Canada indicates household net worth is now declining. Household net worth dropped 2.8 percent to $10.7 trillion in the fourth quarter.
?At this stage, we think the increase in debt servicing costs is more of a headwind to consumer spending than a financial stability risk,? the RBC report states.
Meantime, the debt-to-income ratio soared to an all-time high of 174 percent in Q4, meaning for every dollar of disposable income a household has, they owe $1.74.
?It will take a long period of household incomes outpacing credit growth to deliver meaningful improvement in the debt-to-income ratio. We?re not seeing that yet,? says RBC.
Source: Livabl_
