Household debt hits new high, again

OTTAWA — The amount Canadians owe relative to their income hit a new high in the third quarter.

Statistics Canada said Thursday that household credit market debt as a proportion of household disposable income increased to 171.1 per cent, up from 170.1 per cent in the second quarter.

That means there was $1.71 in credit market debt, which includes consumer credit and mortgage and nonmortgage loans, for every dollar of household disposable income.

Household debt is often cited as a key risk to the Canadian economy.

In a report last month, the OECD said high house prices and associated debt levels remain a substantial financial vulnerability in Canada.

“A disorderly correction would adversely impact growth and could threaten financial stability,” the organization said.

Total household credit market debt grew to $2.11 trillion in the third quarter, up 1.4 per cent from the previous quarter.

The increase came as mortgage debt increased 1.5 per cent to $1.38 trillion, while consumer credit rose 1.2 per cent to $620.7 billion.

Meanwhile, the total net worth of the household sector edged down 0.1 per cent to $10.61 trillion in the third quarter.

The move lower was due to a drop in home values as housing resale prices weakened. The value of household financial assets edged up 0.1 per cent.