Residents of Vancouver and Victoria have the heaviest burdens of consumer and credit card debt, according to a recent survey that finds debt has dropped in Edmonton and Calgary since 2019.Consumer debt has surged by 17.7% since 2019, reaching an unprecedented high of $65,000 in 2023, according to a SavvyNewCanadians.com study entitled Canada's Consumer Debt Surge 2023. Mortgage debt is the biggest driver of this growth, accounting for 74.3% of total consumer debt.Vancouverites have the highest appetite for debt in the country. Although the city leads the nation in consumer debt per capita, it ranks only 17th in growth of its consumer debt over the past four years. Its consumer debt of $360,683 represents a 14.14% growth from 2019.Victoria has the second highest debt at $305,365 and the 20th fastest growth at 13.87%. Toronto is far behind in third at $187,350, but its rate of growth is ninth-fastest at 18.78%.Among Western cities, Kelowna ranks sixth in consumer debt at $112,334, followed by Abbotsford-Mission in 14th with $79,322 consumer debt, Edmonton at 16th with $76,689, and Calgary in 18th at $73,568. Debt shrunk 5.71% in Edmonton and 3.52% in Calgary since 2019.Windsor has seen its consumer debt grow the most since 2019 at 22.47%, followed by Abbotsford at 22.29%, and Brantford at 21.62%.Victoria has the dubious distinction of leading in per-capita credit card debt at $12,874, followed by Vancouver at $12,332 and Oshawa at $7,505. Kelowna trails in ninth at $5,197.Canada’s consumer debt landscape is shaped predominantly by mortgages and Home Equity Lines of Credit (HELOC), which account for a substantial portion of the borrowing habits, totalling 83.2% of the debt composition. The surge in mortgage debt, constituting 74.3% of Canadian household debt, was propelled by soaring housing prices during the pandemic, prompting individuals to take on higher mortgage obligations to secure homes. Population growth and immigration have further intensified housing demand, exacerbating the housing market’s competitiveness. Notably, Canada faces challenges in housing affordability compared to its G7 counterparts, as indicated by the unfavourable price-to-income ratio.HELOCs, contributing 8.9% to the debt landscape, highlight Canadians’ flexibility in leveraging home equity for additional financial needs, demonstrating homeowners’ adaptability in managing their finances. Additionally, diverse borrowing practices are evident in credit card usage (4.5%), underscoring the significance of short-term credit and in auto loans (3.2%) and lines of credit (2.3%), emphasizing transportation and general borrowing priorities. "While these categories individually represent smaller percentages, they collectively reflect the multifaceted nature of consumer borrowing behaviours in Canada, showcasing the adaptability and resilience of Canadians amidst the evolving economic landscape," says the study's author Enoch Omololu.Canadians are taking out more loans to buy houses. Mortgage debt has increased significantly by 22.88% from 2019 to 2023. Limited supply of housing in some areas of Canada has led to increased competition among buyers, driving up prices and leading to more borrowing.Increasing discounts offered by financial institutions continue to boost borrowers’ interest in variable-rate mortgages.By contrast, Canadians have taken out fewer auto loans and other lines of credit in the last five years due to several factors.One reason for this trend is Canadians with bad credit or limited credit history need help getting approved for financing.Moreover, long-term financing has exploded in Canada and at one point earlier this year, 55% of all new car loans were for at least 84 months. Longer loans mean less frequent new car purchases.Canadian consumers must face tough stress tests to qualify for mortgages, likely contributing to some rationalizing their lines of credit by not applying for new lines.Canadian household debt levels are the highest among G7 peers.
Residents of Vancouver and Victoria have the heaviest burdens of consumer and credit card debt, according to a recent survey that finds debt has dropped in Edmonton and Calgary since 2019.Consumer debt has surged by 17.7% since 2019, reaching an unprecedented high of $65,000 in 2023, according to a SavvyNewCanadians.com study entitled Canada's Consumer Debt Surge 2023. Mortgage debt is the biggest driver of this growth, accounting for 74.3% of total consumer debt.Vancouverites have the highest appetite for debt in the country. Although the city leads the nation in consumer debt per capita, it ranks only 17th in growth of its consumer debt over the past four years. Its consumer debt of $360,683 represents a 14.14% growth from 2019.Victoria has the second highest debt at $305,365 and the 20th fastest growth at 13.87%. Toronto is far behind in third at $187,350, but its rate of growth is ninth-fastest at 18.78%.Among Western cities, Kelowna ranks sixth in consumer debt at $112,334, followed by Abbotsford-Mission in 14th with $79,322 consumer debt, Edmonton at 16th with $76,689, and Calgary in 18th at $73,568. Debt shrunk 5.71% in Edmonton and 3.52% in Calgary since 2019.Windsor has seen its consumer debt grow the most since 2019 at 22.47%, followed by Abbotsford at 22.29%, and Brantford at 21.62%.Victoria has the dubious distinction of leading in per-capita credit card debt at $12,874, followed by Vancouver at $12,332 and Oshawa at $7,505. Kelowna trails in ninth at $5,197.Canada’s consumer debt landscape is shaped predominantly by mortgages and Home Equity Lines of Credit (HELOC), which account for a substantial portion of the borrowing habits, totalling 83.2% of the debt composition. The surge in mortgage debt, constituting 74.3% of Canadian household debt, was propelled by soaring housing prices during the pandemic, prompting individuals to take on higher mortgage obligations to secure homes. Population growth and immigration have further intensified housing demand, exacerbating the housing market’s competitiveness. Notably, Canada faces challenges in housing affordability compared to its G7 counterparts, as indicated by the unfavourable price-to-income ratio.HELOCs, contributing 8.9% to the debt landscape, highlight Canadians’ flexibility in leveraging home equity for additional financial needs, demonstrating homeowners’ adaptability in managing their finances. Additionally, diverse borrowing practices are evident in credit card usage (4.5%), underscoring the significance of short-term credit and in auto loans (3.2%) and lines of credit (2.3%), emphasizing transportation and general borrowing priorities. "While these categories individually represent smaller percentages, they collectively reflect the multifaceted nature of consumer borrowing behaviours in Canada, showcasing the adaptability and resilience of Canadians amidst the evolving economic landscape," says the study's author Enoch Omololu.Canadians are taking out more loans to buy houses. Mortgage debt has increased significantly by 22.88% from 2019 to 2023. Limited supply of housing in some areas of Canada has led to increased competition among buyers, driving up prices and leading to more borrowing.Increasing discounts offered by financial institutions continue to boost borrowers’ interest in variable-rate mortgages.By contrast, Canadians have taken out fewer auto loans and other lines of credit in the last five years due to several factors.One reason for this trend is Canadians with bad credit or limited credit history need help getting approved for financing.Moreover, long-term financing has exploded in Canada and at one point earlier this year, 55% of all new car loans were for at least 84 months. Longer loans mean less frequent new car purchases.Canadian consumers must face tough stress tests to qualify for mortgages, likely contributing to some rationalizing their lines of credit by not applying for new lines.Canadian household debt levels are the highest among G7 peers.
