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The Canadian household asset base is overwhelmingly dominated by their housing market. Their households are among the most indebted on earth and in considerably
by adventured 8y ago
The Canadian household asset base is overwhelmingly dominated by their housing market. Their households are among the most indebted on earth and in considerably worse shape than the post great recession US households (who went the opposite direction and pushed their debt burdens downward by a lot and haven't reinflated that).
Two charts to this point.
Housing vs GDP: https://i.imgur.com/NlYEcIT.png https://i.imgur.com/NlYEcIT.png
Canadians are far too over-leveraged on their housing. That seems great while housing values are soaring, as in the past (Australia being a recent extreme version of this, now seeing a market crash). When that turns, you get crushed.
Household debt to disposable income: https://i.imgur.com/1W9LBqP.png https://i.imgur.com/1W9LBqP.png
You can see the Canadian households continued accumulating debt rapidly after the great recession.
Household debt to GDP: https://i.imgur.com/pWKqaY7.png https://i.imgur.com/pWKqaY7.png
Canadian households took their debt to GDP ratio from ~60% to 100%+ over roughly 20 years.
The US household disposable income vs debt service payment figure is at about 9.8%, which is around a 40 to 50 year low (it peaked at 13.2% in 2007).
The Canadian figure is now up to around 14.9%. They're being strangled by debt interest costs.
Over the last few years, there have been an endless parade of headlines about the extreme debt load of Canadian households:
"Canada’s household debt levels higher than any other country, report says"
https://www.cnbc.com/2017/11/24/canadas-household-debt-levels-higher-than-any-other-country-report-says.html https://www.cnbc.com/2017/11/24/canadas-household-debt-level...