For a few years now, market watchers have stood idly, and worriedly, by while Canadians racked up an increasingly alarming level of mortgage debt.
And, in recent months, those who lie awake at night thinking Canadians are being a bit too optimistic about their budgetary abilities can take a sigh of relief — at least for now (and, even then, only sort of).
The headline story on the Globe and Mail’s website today is “Growth of mortgage debt slows: CMHC“. And here’s what they have to say:
“The rate at which Canadians have been racking up new mortgage debt has slowed in recent months, lending credence to the theory that the country’s housing market will hold up, Canada Mortgage and Housing Corp. suggests.”
That’s all well and good. And, I don’t want to be a complete pessimist or anything, but this does not alleviate my concerns with regard to Canadians households’ level of indebtedness. After all, it’s the rate at which Canadians have been racking up debt that has declined — not actual levels of debt.
The CMHC goes on to say that there is no risk of an asset bubble in Canada’s housing market except for in “some centres [which] warrant close monitoring.” I feel like it’s a tad disingenuous to say that as an addendum. The centres they are likely talking about, Vancouver and, to a lesser extent Toronto, drive a large part of the Canadian real estate market.
Also, if they’re making these conclusions based on the newly discovered pace at which people are taking on mortgage debt, then it’s pretty bogus. Debt levels have not declined. They just haven’t increased as much as they have been.
All this article says is that the problem isn’t necessarily being exacerbated any further. And that’s good news — but it shouldn’t be great news for those that were already worried.