Canada’s brewing debt storm

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

Expect to hear more talk of Canadian real estate bubble

The Globe and Mail- The market for new homes is beginning to show the same bounce that led to the remarkable recovery in resales after the slump. Canada Mortgage and Housing Corp. said this morning that housing starts in January jumped 5.8 per cent to a seasonally adjust annual rate of 186,300, with gains in both single homes and condominiums. The jump was led by a surge of almost 20 per cent, month over month, in British Columbia, which analysts said may have been related to construction for the Winter Olympics. Overall, it marked the fourth increase in a row…

Expect to hear more talk of Canadian real estate bubble – The Globe and Mail

First-timers provide the critical thrust

Financial Post- First-time home buyers provided the critical thrust that propelled the real estate market out of a recessionary slump, and with historically low interest rates and reasonable prices, the conditions are still ripe to lure many more potential purchasers into the fold, industry experts say.

First-timers provide the critical thrust