With Canadian home ownership rates already the highest in the world (69% in the latest Stat’s Can survey from 2011), politicians/brokers/financiers continue to plot how best to get even more Canadians buying real estate at record low rates and record high prices. This new OECD chart highlights the extraordinary price risk in British and Canadian home prices today as compared with the other G7 countries. To ‘afford’ the boom in Canadian consumption since 2008, Canadians have been borrowing $1.65 for every $1.00 of income.
A new survey from the Bank of Montreal meanwhile suggests that nearly one in six (16%) Canadians would not be able to handle a $500 increase in their monthly mortgage payments. 27% said they would need to review their budget, and a further 26% said they would be concerned, but could probably handle it. See: Nearly one in six Canadians could not handle a $500 increase in mortgage payments.
Now through the late commodities Supercycle and started into our next cyclical recession, the financial resilience of Canadian families today is at record lows.