Household borrowing ramped up in the third quarter, according to the latest data from Statistics Canada, highlighting ongoing debt worries.
StatsCan reported that total borrowing increased to $28.5 billion in the third quarter, from $21.7 billion in the previous quarter.
Mortgage loan demand rose to $18.5 billion in the quarter. Consumer credit and other non-mortgage borrowing increased to $10.0 billion, StatsCan said.
With the growth in debt, the household debt service ratio rose from 14.82% to 14.96% in the third quarter, and the debt to income ratio ticked up to 175.9% from 175.4% in the previous quarter.
Commenting on the data, BMO Economics said “household debt burdens will remain a crucial vulnerability for the Canadian economy for some time.”
At the same time, StatsCan also reported that Canada’s national net worth was stable at $12.6 trillion in the third quarter. In particular, household net worth rose by $101.4 billion in the third quarter to $11.5 trillion.
The increase in household net worth was driven by an increase in financial assets, which rose by $88.1 billion in the quarter. Non-financial assets also rose by $50.0 billion in the quarter, primarily due to rising real estate values, StatsCan said.
The increase in assets outpaced the growth in financial liabilities, which were up by $36.7 billion in the quarter.