Household worth rebounds after recession
Filed Under Main Content · Tagged: Asset Prices, Assets, Borrowings, Canadians, Decline, Economic Downturn, Economics Research, Economist, Household Debt, Jeffries, Liabilities, Low Interest Rates, Net Worth, Rbc, Rebounds, Recession, Residential Real Estate, Rising Stocks, Statistics Canada, Trillion
Times Colonist- Rising stocks and home prices have helped restore almost all of the value Canadians lost in household net worth during the economic downturn.
Household net worth rose 1.3%, or by $74-billion, to $6-trillion, as the growth in the value of assets, particularly equities and residential real estate, exceeded the increase in liabilities, Statistics Canada reported Monday.
“This marks the fourth consecutive quarterly improvement in household net worth and reflects a 96 per cent recovery off the net worth lost during the recent economic downturn,” David Onyett-Jeffries, economist at RBC Economics Research, wrote in an analysis.
“The increase of household net worth continues to repair the cumulative $552-billion decline.”
Household debt has also risen as low interest rates have encouraged Canadians to increase borrowings, but that has led to strengthening in demand and asset prices, particularly housing, said Mr. Onyett-Jeffries…
Household worth rebounds after recession
Beware the coming credit card hit on Canadian families
Filed Under Main Content · Tagged: Account Balance, Canada Bank, Canadian Coal, Canadian Families, Canadian Households, Coal Mine, Credit Card Holders, Emergency Measures, Filing For Bankruptcy, Globe And Mail, Globe Mail, Household Debt, Interest Costs, Low Interest Rates, Man Woman And Child, Minimum Payment, Personal Debt, Trillion, Western Democracies, Woman And Child
The Globe and Mail- MBNA Canada Bank mailed notices to credit card holders last week, notifying them that the country’s No. 1 issuer of MasterCard will be changing the way it calculates minimum monthly payments. Other card companies are doing the same, in accordance with new federal regulations aimed at greater transparency for consumers.
As an example, MBNA cited an account balance that would have required a minimum payment of $185 in the past; as of August, that required payment will rise to $307, an increase of 66 per cent. A higher payment would reduce interest costs, MBNA noted, adding that it would also “help you pay off your balance faster.”
We now have detected yet another coughing canary in the exemplary Canadian coal mine. Exploiting low interest rates, Canadian households have taken on record personal debt ($1.4-trillion) – more than doubling it in the past decade to now equaling more than $40,000 for every man, woman and child in the country. This is the highest household debt in 20 of the most advanced economies of the Western democracies. More ominously, however inevitably, the number of Canadian households filing for bankruptcy (or taking alternative emergency measures) has also set a record. By year’s end 2009, more than 150,000 families were economic wrecks (up by 30,000 families from year’s end 2008)…
Beware the coming credit card hit on Canadian families – The Globe and Mail
Canada’s brewing debt storm
Filed Under Main Content · Tagged: Bank Canada, Bank Of Canada, Borrowers, Canadians, Caution To The Wind, Cheap Money, Consumers, Day Of Reckoning, Disposable Income, Free Money, Globe And Mail, Household Debt, Low Interest Rates, Mortgage Rates, Recession, Slump, Spur, Trillion
The Globe and Mail-Canadian borrowers are fast approaching a day of reckoning.
Lured by cheap money to buy up, buy in, expand and make over, families have pushed credit levels to a record high.
Now, mortgage rates are beginning to creep up and the Bank of Canada is poised to retreat from the record-low interest rates it adopted to fight the recession and spur recovery.
The end of the free-money era has left consumers more vulnerable than ever, and those who threw caution to the wind could soon face costs they can’t handle.
Household debt has surged three time faster than income in recent years and now stands at a record high of more than $1-trillion. Put another way, Canadians owe about $1.47 for every dollar of disposable income. Even more remarkably, they took on more debt during the slump – a first for a recession – because borrowing was so cheap…
Canada’s brewing debt storm – The Globe and Mail
No Canadian housing bubble: Bank of Canada deputy governor
Filed Under Main Content · Tagged: Bank Canada, Bank Of Canada, Canada Vancouver, Deputy Governor, Federal Government, Financial Times, Global Business Leaders, Government Canada, Government Of Canada, Home Buyers, Hot, Housing Bubble, Housing Market, Low Interest Rates, New Mortgage, Panel Discussion, Paul Jenkins, Vancouver Sun
Vancouver Sun- The Canadian housing market is strong, but it is not experiencing a bubble, Paul Jenkins, senior deputy governor of the Bank of Canada, said Monday.
The federal government said last week it will bring in new mortgage rules to cool the housing sector and prevent home buyers, tempted by record low interest rates, from overextending themselves.
At the same time, it said there was no housing bubble, a point echoed on Monday by Jenkins, who was speaking at a panel discussion at the Government of Canada and Financial Times Global Business Leaders Day in Vancouver, where the housing market is especially hot…
