(Black Press Media files)

(Black Press Media files)

Canadian households added record mortgage debt in late 2020: StatsCan

Canadians owed $1.75 for every dollar of household disposable income

Canadian households piled up a record amount of mortgage debt for the second quarter in a row amid low interest rates and high housing prices, Statistics Canada said Friday.

Hot real estate markets in many regions helped propel house prices higher, pushing demand for mortgage loans to $34.9 billion in the fourth quarter of 2020 — beating the previous high of $28.7 billion set in the third quarter, the agency said.

The growth in the value of real estate also pushed the net worth of homeowners higher, Statistics Canada said.

Residential real estate increased 3.3 per cent in value, the second consecutive quarter of strong growth, as investment in both new and existing homes remained robust, the agency said in its release.

National net worth overall increased to $357,955 from $343,172 on a per-capita basis, and by the end of the 2020, net worth had increased by more than a trillion dollars since the end of 2019, StatCan said.

Meanwhile, debt servicing and debt-to-income ratios saw an uptick in the fourth quarter but remained below pre-pandemic levels.

The household debt service ratio — measured as total obligated payments of principal and interest on credit market debt as a proportion of household disposable income — increased to 13.58 per cent from 13.18 per cent, Statistics Canada said in its release.

Still, the ratio was 9.8 per cent lower than its peak in the third quarter of 2019, the release said.

Household debt as a proportion of income rose to 175 per cent from 170.8 per cent, as debt grew slightly while household disposable income edged down, the agency said.

In other words, Canadians owed $1.75 for every dollar of household disposable income, up from $1.71 in the third quarter but still below the $1.81 Statistics Canada recorded at the end of 2019.

Canadians continued on a strong savings streak, marking the third consecutive quarter of double-digit savings rates, Statistics Canada said.

“The Canadian economy continued to recover, albeit at a slower pace, as households and businesses persisted in adjusting to the realities of the COVID-19 pandemic,” the release said.

“Canadians further reduced their reliance on government support measures as employee compensation regained additional lost ground.”

Yet even while government transfers and subsidies continued to wind down, declining for a second consecutive quarter, they still bolstered household savings and helped keep the savings rate high, the release said.

The increase in financial wealth helped Canadian stock markets recoup their losses from the market panic earlier in 2020, as Canadians looked for places to keep their excess savings, the agency said.

Meanwhile, the federal government continued to replace short-term borrowing with longer-term securities, issuing a record amount of bonds in the quarter, Statistics Canada said.

Canada’s overall national net worth, the sum of national wealth and Canada’s net foreign asset position, increased $602.9 billion from the previous quarter to $13,776.7 billion in the fourth quarter.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Elvira D’Angelo, 92, waits to receive her COVID-19 vaccination shot at a clinic in Montreal, Sunday, March 7, 2021, as the COVID-19 pandemic continues in Canada and around the world. THE CANADIAN PRESS/Graham Hughes
110 new cases of COVID-19 in Interior Health

Provincial health officers announced 1,005 new cases throughout B.C.

Black Crow Cannabis is just one of Vernon's many pot shops now open in town. (Jennifer Smith - Morning Star)
Kelowna has highest cannabis fees in Okanagan

Vernon’s 14 stores pay second highest business licence fees

The Columbia Valley Wetlands are known for their extensive and fragile ecosystem. (File photo)
Wildsight speaks out against logging in Columbia Wetlands

Located 50 kms south of Golden, the proposed operation was justified as bark beetle management

Residents, especially those with yards with long grass and wooded areas, are encouraged to check themselves and their pets for ticks after being outside. Ticks have reportedly been found in Golden near the pump track. File photo
Ticks found in Golden as spring approaches

Between five and 10 people each year go to hospital in Golden for ticks

Community forest (Devon Bidal/News Staff)
Bringing a community forest to Golden

The Golden and Area A Community Forestry Team provides an update

Vancouver resident Beryl Pye was witness to a “concerning,” spontaneous dance party that spread throughout social groups at Kitsilano Beach on April 16. (Screen grab/Beryl Pye)
VIDEO: Dance party erupts at Vancouver’s Kitsilano Beach to the dismay of onlookers

‘It was a complete disregard for current COVID-19 public health orders,’ says Vancouver resident Beryl Pye

Lord Tweedsmuir’s Tremmel States-Jones jumps a player and the goal line to score a touchdown against the Kelowna Owls in 2019. The face of high school football, along with a majority of other high school sports, could significantly change if a new governance proposal is passed at the B.C. School Sports AGM May 1. (Malin Jordan)
Power struggle: New governance model proposed for B.C. high school sports

Most commissions are against the new model, but B.C. School Sports (BCSS) and its board is in favour

Firefighters battled a burning home on farmland in the north end of Vernon Saturday, April 17, 2021. (Brendan Shykora - Morning Star)
UPDATE: Homeowner taken to hospital after Vernon home destroyed by fire

Firefighters engaged in a lengthy battle against the engulfed structure Saturday afternoon

Members of the Okanagan Screen Arts Society received a cheque for $1,500 Thursday, April 15, 2021. The funds are to help the society’s efforts as they prepare take over operation of the Vernon Towne Cinema at the end of July. (Brendan Shykora - Morning Star)
Okanagan dealership gives local cinema a lift

Vernon Watkin Motor Ford, in business for more than 100 years, donated to the theatre with nearly as long a history

Vernon Jubilee Hospital. (File photo)
COVID-19 outbreak declared over in surgical unit of Vernon hospital

The outbreak affected four staff, 10 patients and led to three deaths in just over two weeks

A group of youth in Kelowna's Knox Mountain Park are suspected as having violated the B.C. Wildlife Act by harassing a pair of nesting bald eagles with a drone Friday, April 16, 2021. (Conservation Officer Service photo)
Nesting bald eagles harassed by youth-piloted drone in Kelowna

Conservation Officers are hoping to hear from anyone who witnessed the Knox Mountain incident

Pall Bearers carrying the coffin of the Duke of Edinburgh, followed by the Prince of Wales, left and Princess Anne, right, into St George’s Chapel for his funeral, at Windsor Castle, in Windsor, England, Saturday April 17, 2021. (Danny Lawson/Pool via AP)
Trudeau announces $200K donation to Duke of Edinburgh award as Prince Philip laid to rest

A tribute to the late prince’s ‘remarkable life and his selfless service,’ the Prime Minister said Saturday

B.C. homeowners are being urged to take steps to prepare for the possibility of a flood by moving equipment and other assets to higher ground. (J.R. Rardon)
‘Entire province faces risk’: B.C. citizens urged to prepare for above-average spring flooding

Larger-than-normal melting snowpack poses a threat to the province as warmer weather touches down

Vancouver-based Doubleview Gold Corp. is developing claims in an area north of Telegraph Creek that occupies an important place in Tahltan oral histories, said Chad Norman Day, president of the Tahltan Central Government. (THE CANADIAN PRESS/HO)
B.C. Indigenous nation opposes mineral exploration in culturally sensitive area

There’s “no way” the Tahltan would ever support a mine there, says Chad Norman Day, president of its central government

Most Read