The average price of a house in Canada has now topped half-a-million dollars, an increase of 3.5% over February of last year. Of course, the usual suspects are getting the blame. At the same time the household debt to income ratio has also hit a new high. But housing prices are not entirely responsible.
The latest numbers from the Canadian Real Estate Association put the average price of a house at a little less than $520,000, propped up by the Greater Toronto Area and Greater Vancouver. When those two markets are taken out of the calculation the average price falls by $150,000 to just below $370,000 – a drop of nearly 30%.
Along with the CREA figures, Statistics Canada is reporting that household debt climbed to 167.3% of disposable income in Q4 of 2016, a new record high. Most of that new debt, about two-thirds of it, is mortgage debt but there are other growing components. Credit tracking agency Equifax reports both car loans and installment loans were up by nearly 8% last year, compared to 2015.
Equifax also reports that more Canadians, 46%, are paying down debt. But it says the 37% who are taking on more, are adding larger amounts. StatsCan reports the saving rate is up slightly from 5.2% to 5.5%.