Canadians went on a record debt binge, and are now left with one of the worst hangovers in history. Statistics Canada (Stat Can) data shows the household debt service ratio (DSR) surged to a new record high in Q1 2023. Households now dedicate a record share of income to repayment, and it’s not just due […]
Higher rates weren’t enough to kill Canada’s economy—they only made it angry. The Bank of Canada (BoC) surprised the market with a rate hike last week, and BMO doesn’t think it was the last one. Canada’s economy is running so hot, the market now expects at least two more rate hikes. It’ll almost certainly lead […]
Canada’s economy continues to outperform, despite rising interest rates. In response, the Bank of Canada (BoC) hiked its overnight rate by 0.25 points to 4.75%—the highest rate in over 10 years. To further throttle excess demand, the central bank is also reducing credit liquidity, as it attempts to prevent already elevated inflation from returning to […]
Canadian real estate sales are generally down from historic levels, but households are just waiting for cheap credit. That was just one key insight from BMO’s latest Real Financial Progress Index (RFPI). The survey-based index seeks to capture household economic health, and their perspective on the economy. Not surprising, a good share of the takeaways […]
One of the country’s largest banks sees Canadian real estate getting out of control, and it can hit the whole economy. Scotiabank warns the Bank of Canada (BoC) needs to hike rates soon, or real estate and inflation will get out of control again. Failing to do so won’t just drive home prices higher, but […]
The days of Canada having a reputation of conservative bank practices are coming to an end. In a new research note from the IMF, the global financial agency ranked mortgage default risks for households. Canada’s combination of high household debt, frothy home prices, and floating rate loans makes it the riskiest advanced economy in the […]
Canada’s falling bond yields provided cheap mortgage credit, helping to boost home prices. Now it’s reversing course, with Government of Canada (GoC) 5 year bond yields rising sharply. The yields directly influence fixed mortgage rates, and over just a few days they’ve nearly reversed the discount given after the US banking crisis. Higher rates will […]
Canadian mortgage borrowers are fleeing unpredictable variable rates, and getting more leverage. Bank of Canada (BoC) data reveals that nearly three-quarters of mortgages issued in March had rates fixed for 1 to 5 years. It’s a big change from a year ago, when most borrowers were opting for variable rates. Borrowers shifted their preferences after […]
Canadian mortgage debt is finally returning to normal just a year after rates began climbing. Bank of Canada (BoC) data shows households continued to slow down on the mortgage credit borrowing in March 2023. The growth rate has now returned to levels more typical of the 2010s—back when people thought they knew what a frothy […]
Canada’s real estate frenzy fallout is only just beginning, according to its central bank. The Bank of Canada (BoC) published their latest Financial System Review (FSR) today, with mortgage repayment presenting a threat to the economy. They forecast that existing borrowers will see their payments climb significantly by 2025, especially if borrowers don’t extend the […]
