Despite rising interest rates, household borrowing continued to rise in March, according to new data from Statistics Canada.
The national statistical agency reported that overall household borrowing rose by 0.5% in March, up $14.4 billion to $2.69 trillion.
The vast majority of the increase, $13.2 billion worth, came in debt linked to the real estate market (mortgage borrowing and home equity lines of credit (HELOCs)), which totalled $2.16 trillion in outstanding debt.
StatsCan said that mortgage debt grew by 0.6% in March, an increase of $12.7 billion to just under $2 trillion ($1,989.5 billion). On a year over year basis, mortgage debt was up 10.5% in March.
The increase in mortgage borrowing came in the wake of a rate hike by the Bank of Canada at the start of March (to 50 basis points), and a further increase in April to 1.0%.
At the same time, non-mortgage debt grew by $1.7 billion (an increase of 0.2%) in March to a total of $704.5 billion.
Credit card debt at the banks rose by 0.9% in the month (an increase of $727 million).
While this was the second consecutive monthly increase in credit card debt, StatsCan noted that credit card balances remain below their pre-pandemic levels, down by roughly $9 billion from their level at the end of 2019.
The increase in credit card debt came amid a strong rise in retail sales in the month, the report noted.
“An advance estimate of retail sales indicated growth of 1.4% in March, following a 0.1% increase in February,” it said.
Additionally, the agency reported that HELOC balances rose by 0.3% ($510 million) in March to $167.3 billion.