2nd quarter | Total consumer debt has increased in Canada

(Toronto) Total Canadian consumer debt reached $2.32 trillion in the second quarter, up 8.2% from the same quarter last year, Equifax Canada said Tuesday.

Posted at 7:10am
Updated at 12:29 p.m

According to the credit rating agency’s report, increased new lending and higher inflation-linked spending helped consumer non-mortgage debt rise to $591.4 billion, up $5.2 billion from a year ago.

Average nonmortgage debt per consumer was $21,128 in the second quarter, up 2.4% year over year.

That amount was $18,429 in Quebec, the second lowest among Canadian provinces, compared to $20,701 in Nova Scotia, $21,888 in New Brunswick, and $22,239 in Île-du-Prince Edward.

Alberta residents had the highest average debt at $25,056, and Manitobans had the lowest at $16,956.

Rebecca Oakes, vice president of advanced analytics at Equifax Canada, points out that financial strains are becoming a reality for many more Canadians.

The impact on consumer credit is not only visible in everyday credit card spending, but also in other nonmortgage debt, such as car loans and lines of credit, where balances are rising, M.me oak trees

Credit card balances hit the highest level since the fourth quarter of 2019, Equifax said.

“Credit card spending is at historic highs,” Frau said.me oak trees Strong consumer demand for credit cards creates a competitive market for lenders. Consequently, the credit limits for the new cards are much higher than in previous periods. »

According to Equifax, the average credit limit for new cards is over $5,800, the highest in seven years.

The report also notes that new mortgage volumes in the second quarter fell 16.4% year-on-year in a slightly less active housing market in recent months.

Despite the housing market slowdown, the average loan size for first-time homebuyers fell just 0.5% in the second quarter compared to the first quarter, with average monthly payments rising 10%.

“A slowdown in Canada’s real estate market is far from equating to an increase in affordability,” argued Frau.me oak trees

“Affordability depends not only on house prices, but also on the monthly repayment obligations that come with mortgages. Higher interest rates combined with high inflation are really helping to increase monthly consumer spending; Many may have difficulty qualifying for a mortgage. »

According to the report, the average loan amount for new mortgages in Canada was over $367,000, with average loans for first-time homebuyers exceeding $430,000.

Equifax also noted that consumer bankruptcy has reached its highest level since the pandemic began, largely due to an increase in consumer filings.

The report comes as economists expect the Bank of Canada to hike rates sharply on Wednesday as the central bank struggles to control inflation.

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