BUSINESS

Household Debt In Canada Hits Record 162.6% Of Income After StatsCan Revisions

12/15/2014 10:27 EST | Updated 02/14/2015 05:59 EST
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Canadian household debt reached an all-time high in the third quarter of 2014, Reuters reports.

Average household debt reached 162.6 per cent of average household disposable income in the quarter. Statistics Canada revised its estimates for the previous three years downward, so the new numbers are lower than figures previously reported.

The number for the previous quarter -- 163.6 per cent -- was revised to 161.7 per cent. That makes the new number for the third quarter the highest debt ratio yet.

StatsCan said it made the revisions because it had initially overvalued mortgages.

The Canadian Press reports:

TORONTO - Canadian household debt grew at a faster rate than disposable income in the third quarter of the year, according to Statistics Canada.

The total amount of credit market debt — which includes mortgages, non-mortgage loans and consumer credit — held by Canadian households increased to 162.6 per cent of disposable income during the quarter, from a revised 161.5 per cent in the previous quarter.

That means Canadians owed about $1.63 for every dollar of disposable income in the third quarter.

Meanwhile, the debt service ratio — the amount of interest paid on mortgage and non-mortgage debt as a proportion of disposable income — declined to 6.8 per cent, an "all-time low," according to Statistics Canada.

Both the mortgage debt service ratio and the consumer credit debt service ratio edged down during the quarter.

Household net worth climbed 1.3 per cent during the quarter, after a 2.2 per cent increase in the previous quarter. Household net work was $232,200 on a per capita basis.

Consumer Debt Per Person (2014)