Published September 13, 2023, 9:31 am ET
Credit cards seen on Thursday, July 1, 2021, in Orlando, Florida. Statistics Canada says the amount Canadians owe relative to their income rose in the second quarter as debt grew faster than their income. (THE CANADIAN PRESS/AP/John Raoux)
OTTAWA – Statistics Canada says the amount Canadians owe relative to their income fell in the second quarter as disposable income significantly outpaced debt growth and demand for mortgages fell.
The agency says the private credit market’s debt-to-household disposable income ratio fell to 180.5 percent in the second quarter, compared to 184.2 percent in the first quarter of the year, seasonally adjusted.
In other words, there was $1.81 in credit market debt for every dollar of household disposable income in the second quarter, compared to $1.84 in the first three months of 2023, according to Statistics Canada.
Meanwhile, the household debt service ratio, measured as the total number of principal and interest payments required on credit market debt relative to household disposable income, was 14.79 percent in the last quarter, compared to 14.90 percent in the first quarter, which reached its highest Status since 2019.
The changes came as seasonally adjusted household borrowing fell to $17.1 billion in the second quarter from $20.4 billion in the first quarter, as demand for mortgage loans fell to its lowest level since 2005 .
The seasonally adjusted total stock of household credit market debt was $2.86 trillion in the second quarter, up 0.6 percent from the first quarter, while mortgage debt totaled $2.13 trillion.
This report by The Canadian Press was first published Sept. 13, 2023.