Canadians are piling on debt to purchase property at the fastest pace in more than a decade amid a pandemic-driven housing boom.
Household mortgage debt grew by 1 per cent in April to $1.69 trillion (US$1.4 trillion), Statistics Canada reported Friday in Ottawa. That’s the fastest pace since 2010. In absolute terms, residential mortgage credit was up $17 billion during the month, the largest one-month increase ever.
Low borrowing costs, tight supply and increased demand for single-family homes during the COVID-19 pandemic have spurred bidding wars and a spike in home values across the country. Friday’s data shows just how much the boom in prices is fueling mortgage debt -- a major concern for policy makers.
The average sale price for a home in Canada has surged 38 per cent to $688,208 over the past year, according to data from the Canadian Real Estate Association.
Total credit to households was up 0.9 per cent in April, the fastest gain since 2011, to $2.49 trillion. While mortgage debt is soaring, Canadians have pared back on other types of debt since the start of the pandemic. Non-mortgage credit was up slightly in April but still remains below pre-pandemic levels.
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