Residential Market Commentary - week of September 12, 2016
Sep 12, 2016, 15:22 PM
Record low interest rates are the most commonly cited reason for the record debt-load being carried by Canadian households. Over the past couple of weeks it has become clear there will not be any big increases anytime soon. The Bank of Canada, the U.S. Federal Reserve and the European Central Bank have all stood fast with their latest settings.
There are unlikely to be big increases in wages either. The latest survey by Mercer Canada suggests a national, average salary increase of just 2.3% in 2017. That is the smallest increase in the 20 year history of the survey. The findings support concerns that cost increases, especially for housing, are vastly outpacing people’s ability to pay.
Another recent survey, by the Canadian Payroll Association, just adds to concerns about the ability to pay. It suggests: nearly half of Canadians would find it difficult to pay their bills if their wages were delayed by even a week; 40% spend all or more of their net pay; nearly a quarter could not come up with $2,000 to cover the cost of an emergency, within the next month.