Federal aid and mortgage payment deferrals are helping stabilize the market
Canadian household debt has shown relatively muted increases despite growth in the mortgage segment, according to data from the central bank.
Household credit stood at $2.29 trillion in May, which was essentially flat from the month prior and 3.6% higher annually. The year-over-year pace was the slowest since June 2019, Better Dwelling reported.
This accompanied the new record high of $1.68 trillion in overall mortgage credit, increasing by 0.6% monthly and 6% from May 2019 – the highest annual increase since July 2017.
“Growth over the past few months has been soaring, almost making a vertical print,” Better Dwelling said. “The annualized 3-month rate of growth reached 8.2% in May, the highest level since 2010.”
Federal fiscal support and payment deferrals – which exceeded 743,000 in May – are helping stabilize household finances in the interim.
Figures from the Office of the Superintendent of Bankruptcy Canada showed that the national market saw a significant decline in insolvencies as a result: OSB’s latest figures indicated that there were 6,111 insolvency filings in May, falling by 8.8% monthly and 51% year-over-year. The agency said that this was the largest annual decrease since 1988.
