Canada Growing Household Debt

🇨🇦 CMHC recently highlighted the growing household debt vs. GDP in Canada. 75% of the debt are mortgages.

Different from the 30-year fixed rate in the US, Canadian mortgages typically are 2-5 years fixed or variable, which goes up sharply with the fast-rising rate.

The higher mortgage cost has led the housing market to correct. In the annual risk outlook, the financial regulator OSFI ranks housing market downturn risk as #1.

How to de-risk?

CMHC points to the increase of supplies - for both homes and rental units.

In 2022, the Ontario housing task force called for 1.5 million new housing in the province in the next 10 years.

The direction is clear. Now Canadians need to make it happen.

Source: CMHC