credit and debt
MORE OF A MIXED BAG THAN A RED FLAG Although BC residents on average owe more money than they did a year ago, there are positive signs in the details.
Across mortgages, auto loans, credit cards, lines of credit (LOCs), and home equity lines of credit (HELOCs), the average monthly debt obligations of British Columbians has risen by 5.5% over the past year, to a total of $3,367 per month. The rate of growth of these financial obligations—notable because it exceeded the rate of inflation over the past year, making said obligations more expensive in real terms—and the current dollar value of these obligations are both causes for concern, but certainly not panic. One important feature of these financial obligations is how they are changing across
debt categories: of the $176 increase in average monthly obligations in BC over the past year, $160 (91%) was associated with debt secured by residential assets. Secondly, consumers appear to be shifting away from old-fashioned LOCs and into HELOCs. From an overall financial risk perspective these are positive characteristics of BC’s changing debt structure. And with interest rates expected to continue to fall in the coming months, expect more muted growth in BC’s average financial obligations over the near-term.
DEBTS OWING: SOME PAYMENTS FALLING, OTHERS GROWING
15.0%
12.3%
10.8%
10.0%
6.5%
4.8%
5.0%
3.6%
3.1% 2.7%
0.0%
0.0%
-0.5%
-5.0%
-6.5%
-10.0%
MORTGAGE
AUTO
CREDIT CARD
LOC $185
HELOC $667
AVG MONTHLY OBLIGATIONS Q
$1,881
$577
$57
Q1 2017 - Q1 2018
Q1 2018 - Q1 2019
SOURCE: CANADA MORTGAGE & HOUSING CORPORATION DATA: VANCOUVER CENSUS METROPOLITAN AREA
26
rennie.com
Made with FlippingBook - professional solution for displaying marketing and sales documents online