Canadian Mortgage Debt Is Chugging Along, Despite The Slowdown

Canada’s addiction to mortgage debt is strong, despite the housing slowdown. Statistics Canada (Stat Can) data shows the balance of outstanding mortgage credit hit a new record in December 2022. Mortgage credit growth has slowed to the lowest level in years, but remains unusually elevated compared to pre-2020. That remains a concern with a balance the size of Canada’s GDP, and growing significantly faster. 

Canadians Owe Over $2 Trillion In Mortgage Debt

Canadian mortgage debt is still on the rise, adding billions at the end of last year. The outstanding balance rose 0.1% ($3.0 billion) to hit a total of $2.08 trillion in December. This represents a 7.1% ($137.8 billion) increase from last year. Just the sheer size of this debt should present concerns, concentrated amongst a third of a relatively small population. However, it’s beginning to moderate in growth.  

Canadian Mortgage Borrowing Is Much Slower With Higher Rates

Slowing real estate sales and higher rates are putting a drag on mortgage credit. Annual growth peaked in February 2022, a month before the first hike to the overnight rate. Since then, we’ve seen deceleration every month up to the 7.1% reported in December. It’s now at the lowest growth rate since October 2020. 

Canadian Mortgage Debt Hits A New Record High

The outstanding balance of Canadian residential mortgage credit owed to institutions.

Source: Bank of Canada; Better Dwelling.

Slower Isn’t Slow, and Mortgage Debt Still Outpaces Productivity

It’s important to remember that slowing isn’t slow. Outstanding mortgage credit is still accumulating at an unusually fast rate. The rate for this past December was still 1.4 points higher than the average in the 5 years prior to 2020. It’s also growing much faster than GDP, despite being roughly the equivalent size. 

Canadian Mortgage Debt Growth

The annual growth rate of Canadian residential mortgage credit.

Source: Statistics Canada; Better Dwelling.

Canada’s mortgage addiction is slowly being reigned in by higher interest rates. However, mortgage credit growing faster than GDP is almost certain to lead to slower consumption. In short, the non-productive financial economy is killing the productive economy, and that’s bad news for long-term growth



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  • Ray 1 year ago

    They’re borrowing more in order to survive.

  • Bernie Bogner 1 year ago

    Want to hide the beauty of Vancouver/BC?
    This is the ugliest photo of the bridge I know.

  • Chris 1 year ago

    Like an addict that keeps using after the high is gone.

  • toka 1 year ago

    I don’t mind people borrowing and taking on more and more mortgage debt.

    Just don’t make it other people’s liability when things turn downwards.

    Banks passing on losses to others via asking govt to print money and via CMHC and bailouts and other schemes is a total fraud.

    If you pocketed the gains on the way up, eat the losses on the way down.

  • J 1 year ago

    $1 inheritance for the kids 😀
    The perfect balanced life (yolo).

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