Canadian households are carrying more debt on average than they were last year but it is generally as the result of “good” spending. A report from mortgage lender BMO shows that 80 per cent of Canadians are in debt, the same as last year, but the amount has risen to $93,000 from $76,140. On a positive note the report says that most of this debt is for “smart purchases” such as property and education.
Nationally, mortgages accounted for 49 per cent of debt, followed by buying a car (46 per cent), home renovations and repairs (33 per cent) and education expenses (32 per cent.) Quebec and Alberta had the highest proportions of mortgage debt (55 per cent) while Atlantic Canada had the lowest (41 per cent).
According to BMO Economics, home sales are up 6 per cent in the first half of 2015 from a year ago. "Home sales remain resilient across most of the country, led by soaring transactions in Toronto and Vancouver. Of growing concern, however, is that rapidly rising house prices in these two cities could encourage some households to take on larger mortgages than they can handle when interest rates rise," said senior economist Sal Guatieri.
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