The sizeable share of the Canadian population that was born since 1995 (28%) is emerging as a generation with no problem living on credit.
A new report from Transunion shows that 8% of the Generation Zs in Canada are over 18 and of these 63% are credit active. Of the six nations selected for the study (which also includes the US, Colombia, Hong Kong, India, and South Africa), the US leads for credit active Gen Zs with Canada the only country to come close (63%).
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Almost all (99.8%) of credit active Gen Z adults have a credit card while 28% have a student loan, 5% an auto loan, 23% have a private label card, and 16% have an unsecured personal loan.
The fastest growing credit product among this cohort though is mortgages at 71% followed by home equity lines of credit at 48%. Personal loan, bankcard, and auto loan complete the top 5 in this regard.
A previous Transunion report predicted that the average mortgage balance is likely to go up 3.6% by the end of 2020, reaching around $285,000. Delinquency levels are projected to remain nearly flat at 0.51%.
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?Gen Z is the first generation of digital natives, and they have come to expect a seamless consumer experience across all walks of life ? including how they access, use and manage credit,? said Jason Laky, executive vice president and head of financial services at TransUnion. ?Our belief is that the desire for credit among this generation is significant across the board and improving economic conditions will likely serve as a springboard for more credit, especially in emerging credit markets. It?s critical for lenders in both emerging and established economies to have the ability to make more informed decisions on prospective customers and earn their trust as well as their business.?
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Despite the thirst for credit among Gen Zs, the report also highlights that a sizeable share are prime and above.