Debt-to-income is still near record highs but wealth has increased
There has been a slight improvement in household debt compared to income, as Canadians increased their wealth at the end of 2017.
Canadian households’ debt-to-income ratio was 170.4% at the end of December 2017, down from 170.5% at the end of the third quarter.
Statistics Canada says that the total value of household debt increased by 1.1% in the last three months of 2017 to a total of $2.1 trillion with the bulk of that from mortgages (up 4.1% seasonally-adjusted to $16 billion.)
Fast-growing non-mortgage borrowing amounted to $630 billion in the fourth quarter.
Meanwhile, leverage, measured by the ratio of household total debt to total assets, declined slightly from 16.7% to 16.6% at the end of the fourth quarter, as total assets grew at a faster pace (+1.9%) than the value of total debt (1.1%).
For investors though, the sluggish gains for real estate came as equities strengthened.
Equity and investment funds gained $110.5 billion in Q4, 2017 as domestic and foreign equities gained, boosting overall household financial assets by $196.9 billion to $6,876.0 billion.
The rise in equities also boosted life insurance and pension assets by $68.4 billion.
National net worth, the sum of national wealth and Canada's net foreign asset position, increased by $243.5 billion to $11,169.7 billion at the end of the fourth quarter. On a per capita basis, national net worth increased from $296,200 in the third quarter to $302,300 in the fourth quarter.
