Canadian household debt as a share of income dipped in the first quarter but remained near record highs, Statistics Canada said on Wednesday in a report likely to reinforce concerns that consumers are becoming overly indebted.
The ratio of debt to disposable income edged down to 166.9% from an adjusted 167.2% in the fourth quarter. That meant Canadians owed C$1.67 for every dollar of disposable income, Reuters reported.
The Bank of Canada—which warns borrowers that interest rates will one day move up from near record lows—last week said rising consumer debt levels and an unbalanced housing market had raised household vulnerabilities.
On a seasonally adjusted basis, households borrowed C$27.5 billion ($20.8 billion) in the first quarter, down from C$27.6 billion in the previous quarter.
Mortgages made up C$20.9 billion of this, an increase of C$2.7 billion, while consumer credit and non-mortgage loans fell C$2.8 billion to C$6.5 billion.
Economists and Bank of Canada officials have warned about the dangers of increasing levels of household debt. The value of non-financial assets grew 1.7% on a quarterly basis and 7.7% annually, which Statistics Canada attributed to a strong real estate market, CBC reported.
Total mortgage debt reached $1.341 trillion in the quarter, compared to consumer credit debt of $595.3 billion.
Household income grew 0.9% quarter-over-quarter, outpacing the 0.7% quarterly growth in household credit market debt.
Per capita, Canadian household net worth was $287,700 in the first three months of the year. Household sector net worth rose 2.2% in the quarter to $10.533 trillion at market value, as the value of financial assets increased.
Household net worth captures the value of financial and non-financial assets, including housing, mutual funds, and bank deposits excluding liabilities.
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