Canada has highest household debt level in G7
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- Опубліковано 28 чер 2024
- Aled ab Iorwerth, Deputy Chief Economist at CMHC, joins BNN Bloomberg to discuss Canada having the highest household debt level in G7.
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Almost all of our income goes into paying rent or mortgage. We are working just so we can continue to live in Canada.
this is so fucked up. no-hope-land
Canada is overrated !!
@gormenfreeman499
1 second ago
Whos idea was it to build everything luxury. They need a bitch slap. Make no frills dumps great again.
@@gormenfreeman499 That's how it's always been. You don't build cheap housing. You build fancy, the it gets older and cheaper as you go
@@quixomega It's not just housing, it's everything. There's no cheap restaurants, cheap car service, cheap transit options intercity, cheap grocery stores.. I've lived in other countries and they all have some fancy areas but also some cheaper options to help average people save.
Money laundering, foreign buyers, incompetant govt.
Triple whammy
Unsustainable levels of immigration.
Bingo
Record high excess deaths too and violent crime rates
Stupid comment just in case you don't know, foreign buyers are banned from the real estate market so read the news and educate yourself xenophobic canadian.... What's your iq level ?
@@Carolinapetroska
But not students or refugees as they are exempt from the ban.
Canada needs to invest more in businesses, R&D and IP and less into housing. Literally all we do in this country is by rental properties, we need to divest that capital into more productive things.
barriers to entry in the market is too high. We're taxed and regulated to death. You want to improve things in Canada ? Then stop voting for Liberals
Absolutely Canada is far behind in investing in innovation and technology.
Tell that to our Say all do nothing Parliament!
lol ok bro, ppl have been saying that for 50 years. Just stop lol. At some point you just have to accept that this is how things will always be.
Everything is fine. Nothing to worry about.
Thanks Trudeau!
House prices could remain high forever, not forecasting a recession, and people will have great difficulty dealing with it. Wow, great information. I've learned a lot.
I would like, for once, a "mainstream" news story to acknowledge that the law falling behind on short term rentals and allowing houses across the board to be removed from the market as a long term rental or a house for a family to buy, just may have contributed to a housing supply issue. A lot of municipalities across the country are finally passing by-laws prohibiting entire houses becoming Air BnBs, but the damage has been done. Hopefully, after by-laws have been passed, more houses will hit the market.
Definitely. I think recently it was discovered 1 in 5 homes in canada are owned by investors. Much higher than was expected. I also imagine on areas like Toronto and Vancouver that percentage is likely much higher. Really ashame that housing is being used as an investment tool rather than for shelter. You're right, there should have been regulations preventing firms like Blackrock from scooping up so many homes, driving up prices as they want a big return on their investment.
@@doctorgonzo5358
Blackrock is a thing, because government meddling made housing too costly to build and own leaving only the riches of the rich to take on the task.
Crash the bubble. Living in Canada means trading your quality of life to service debt.
And people are still bidding up on houses, even right now when interest rate is at the highest. The Canadian debt to brain cell ratio is even higher!
I know a number of ppl that bought during the
pandemic, just craziness.
One of the problems is that the gov't increased the allowable % of income going to housing from 40% to 53% allowing banks to lend more money which increases prices.
don't forget borrow more on your RRSP and create FHSA to fuel the flames
Seriously, debt is not wealth.
I cancelled every subscription and paid down every credit card during the pandemic. Did anyone really expect that we'd go thru a pandemic without a financial recession?
My price on a house in Toronto is $400k, just wait. No condos, a box with condo fees is not smart.
Wholly and completely misunderstanding of how affordable housing got to where it is. Created by central banks and governments by setting interest rates too low for too long a period. The housing market was balanced by keeping rates at close to 10% so that moderated how many people could qualify for a mortgage. Dropping the rates meant everyone qualified so the housing stock which was created based on only a percentage of the population actually being able to buy got out of balance. The amount of houses doesn’t match both the population and ever did but now the government seems to think it should. Most governments are filled with poly sci grads, history grads and lawyers and none of those people understand a balance of supply and demand.
And CMHC guy thinks affordability is solved by building more homes. You’d need to triple the number of homes to make it a buyers market and see price drops of any amount.
Many politicians are homeowners and landlords so why would they want the value of their homes deteriorated? Some of the top realtors in Canada own multiple properties including rental property. They love the squeeze on limited rentals. They’ll make money forever. And then the builders don’t want to make houses that sell for cheap. They want large profits.
So no key players are in a position of gain when prices drop.
Hard to imagine governments ever solving a problem without first instituting a tax. That’s their solution to everything. They created this monster so it’s unrealistic to think they know how to kill the monster. Especially when they are the monster.
Current cpi inflation has exhibited a disproportional high level of Real Estate driven debasement as a result of 14 of the last 15 years of donut rate policy.
One needn't look any further for the coming Financial System Liquidity Crisis/insolvencies than Canada's $1.86T GDP back in 2013 supporting an alarming even back then $1.05T Real Estate Debt instrument expansion...... that has now exploded to a $2.8T Debt instrument Bomb($2.1T Mtg + $722B personal) attempting support off a GDP that has only grown to now $2.05T in 2021.... and 15.7% of THAT is Real Estate RERL activity ?
SEE the 'problem' ?...... completely unsustainable and in fact somewhere around a $400B-$500B hole about to emerge ?
Agree with second half but that first half is not it. The key is to reserve the houses for families. Not exclude certain families and create more inequality.
How do you build more homes when borrowing costs are higher? Did the price of labor and materials go down? Are the government permit officers cutting their wages? Higher cost of capital = Less building.The intent of the government was to slow down building.
No surprise…even Uber drivers can get a loan for 2M houses 😂😂😂
The root of all our problems is the level of immigration, and low productivity. The banking, real estate, immigration, and political industries have sold out the future of Canada. All is lost.
The government has BALLOONED. In the 90s a private oil company paid double what the same job in government paid. Now its the opposite.
That and supressed/stolen wages.
u mad bro?
I’m a builder and I live on a boat in b.c. I can’t even afford bare land around here thanks to my great government
No kidding!! House prices are criminal, land prices, food costs and fuel prices are ridiculous and Canadians have the highest debt per household really tell us something we dont know! The middle class everywhere are all headed for the streets within the next 5 years!!! This country is no more!
But you have universal healthcare, right? So what's the problem? Leftholes in America say universal healthcare solves all problems.
The reason productivity is so stagnant is that saving went into a housing bubble rather than into productivity improvement. The sooner those bad debts are written off, the better.
All by design....
Note that the Deputy Chief did not mention at all the natural consequences of excessively low interest rates for an extended period (following the lead of the U.S.A. Fed). Such conditions naturally lead to excessive risk taking, house flipping in valuable areas, etc.
Milton Friedman famously said: “Inflation is always and everywhere a monetary phenomenon, in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output.”
I would guess that the Deputy Chief at CMHC does not want any of the underlying consequences of Bank of Canada, U.S.A. Fed, and the greater G7+ nations to be known so he avoids the topic with "no magic solution" politically vague answers.
Australia is not behind and the Government, RBA, APRA are doing their best to support house prices.
People keep buying things they dont even need
Hey there so called expert, how do you expect housing supply to increase when credit is contracting?
Too many monopolies so very low productivity
As a matter of government policy.
So ironic at the end of video an ad is presented to me on how to set up air bnb property, one of the reasons why home prices were driven up.
And AirBnB's are a thing, because the government have made long-term rentals too costly to own and maintain.
The only solution to the housing crisis is to change our zoning laws and allow more density in our cities.
Thank God there are people like you who have brains. It's time to end the post world War zoning laws and dumb suburban "experiment". most of the post world War developments has been Car oriented as a result every households need 2 cars. We need more townhouses and low rise condominiums like in Montreal and transit oriented developments so that we are not enslaved to cars. Glad that Toronto recently removed single family zoning but it was too late, they should have done that a decade ago.
Also to people who buy way more automobile than necessary...
And the average house price has gone up by $100,000 (to $716,000), since January 2023.
borrowing from Peter to pay Paul situation.
Ponzi scheme
actually she said they're borrowing from Peter to pay Paul.
Canada refuses to build more housing supply. The cities are to blame with their strict zoning and slow bureaucracy. Can't get a permit to build or zoning for a new neighborhood in less than 5 years.
Builders are not incentivized to build starter homes. If they do get land zoned for single units, they build mcmansions on that property, because that is more profitable. So getting started on the housing ladder and starting a family is tougher.
The Federal Government is also to blame for bringing in 500,000 immigrants per year with no plan on how to house them. The housing problem today is a supply driven problem. There needs to be more supply.
Actually it’s the same Canadians to blame who don’t any new construction of housing in their area. Gov gives in to the nimbys so much building proposals have to jump so many hoops before they can build. As for McMansions it’s really cause the land value has risen so much and the zoning is so restrictive all you can do is build those to barely make a profit.
@@sharinglungs3226
That and condos.
Jobs even professional jobs don’t pay well. Everything is taxes and consumption. No real innovation or anyway to be more efficient. People always thinking about going to the cottage in the summer. Of course this is going to happen. Housing prices going through the roof but not solving root of the problem.
Freeland says "Mr. Speaker, Canada has the lowest debt among G7 . . . "
That’s not good. Sorry for our Friends.
Imagine sitting at CMHC as some "chief economist" and your job is literally just talking about housing...man what a gravy train.
Rampant residential real estate speculation is where the excess inventory lies. Start talking about it BNN!
CULTURE - and a march away from old structures and traditions is the root of this.
And..... that "highest level of household Debt in the G7" is concentrated entirely within approximately 30% of the Canadian Big 5 Bank Mortgage Portfolios ?
And if that FACT doesn't lend perspective to the view of Canadian Banks being so supposedly "Well Capitalized"..... right up at least until THEY AREN'T ANYMORE ?
Not so different from Silicon Valley Bank was "well capitalized" a week before it went bankrupt !
Lets see how long those houses stay with the banks.
Thanks trudeau
Chrystia was right ! We’re # 1 in the G7
I love it! Let’s keep it going! Canada #1
There would be plenty of supply if mortgages were 8-10% and over-leveraged "property portfolios" got liquidated.
A home mortgage that is no more than 25% of your monthly take home income including escrow ( taxes, HOA, and insurance) should be the only debt a household should have to not only be secure in their home but prepare for a well funded retirement. That being said, if you're not in that position today immediately adopt a budget that will put yourself in that position. The absolute key for having financial freedom is plan for financial freedom.
No one bothers about good governance and management. The current state is laid bare for all to see.
So why you bailing out the homowners with 40 year mortgage amortization.... you should have held them to the flame 🔥 forced them to sell their home and let them continue paying the heloc debt.....high housing Costs the banks concuder heloc debt to be consumer debt how silly ita fully home debt related....homowns taking on more mortgage debt more like homowners during the pandemic 1% rates consolidated the past consumer debt back I to the same hone they never could afford ...
But that would bring housing prices down, they wouldn't do that.
There would be foreclosures everywhere. Banks would get clobbered risking their failure. Lower real estate market (which should happen in this case as you allude above) would mean transfer fees collected by the Gov't would go down. Municipalities that charge you property taxes based on the value of your home would see their revenues decrease. The death spiral we'd see in the Canadian market would be pretty widespread. There's no way an entry level home in Canada should cost anything close to what it does. This is a coordinated effort by the Gov't to either enslave you financially or eventually take everything away from you.
More supply doesnt help if they are all rentals
Anyone living in a house worth more than 300k might as well be in an alternate reality as far as I'm concerned. HGTV makes the "mansion" in Fresh Prince of Belair look like a shack. When I was a kid it looked like a mansion to me. Why do people need such extravagance? My old house in the country may not be much by so called modern standards, but at least I have zero debt of any kind.
Perhaps you can closed your parliament house building bcoz its useless
Borrow from Peter to pay Paul situation that's an interesting way of looking at mortgage lending in Canada these days.
Just ignore [it] and therefore the problem/s never existed in the first place. Easy-peasy.
Does not help that govt allowed banks to give 70 80 and 90 yr ammortization with zero money going to principle, all money payments going to interest., govt protecting banks again.
How can you say canada when your graph indicate Australia as the highest
Australia overtook Denmark?
Not people’s fault banks are giving mortgages. Why
This is evil
Yes there is not enough housing supply but WHY? The government has done his job? Obviously, NOT he hasn't!!! Also the prices are in a housing bubble market, nothing has been done about that tragedy!!! Speculation and GREED drives current housing market like houses were simply stocks ... Houses are where the people live this is not just about Money and GREED!!! Canada has become the worst place to live nowadays...
But thanks to taxes, regulations and bureaucracy, housing is for speculation and investment.
Love her spin on the housing affordability crisis. "RE is booming". His response "absolutely, and that is the problem"
Everything in Canada is a monopoly and that includes the builders, they will never build more than demand as that would reduce profit.
I refer to Canada as an Oligopoly market. 5 banks, 3 Telcos, 2 grocers, 2 insurance companies that dominate. Barriers to entry are too high, Gov't wont allow foreign competition cuz it would upset their tax base and gravy train. Massive Public Sector on top of this means that anyone working outside the above is rarely going to succeed. Canada will become Venezuela of the North.
Currently, they're barely allowed to build as bureaucracy and restrictions have made new housing costly to build.
Yes, credit card, mortgages, groceries prices keep going up and up, every thing, so we Canadians are going to leave behind.
Have you seen what jobs AI is replacing already? Forecast a super recession. Not an ordinary one.
Better continue Hybrid Work to see the drop of Household Debts aided by Rate Hikes and Job growth you have new sources of Income to payoff the Debts in Cyclic Economy creates Inventory led with Demand Growth across all of the Industries giving many new valuable jobs with handsome Payrolls that's enough for Savings despite the Spending with Low CPI for Sophistication reflected in Living Space Comforts that'll only gives in Individuals' Productivity contributing towards the growth of a Nation with its pass on to Next Generation.
Makes sense!😂
Get rid of airbnbs and we will have lots of supply! We dont have housing but rich people can come visit and get an airbnb instead of a hotel? Its killing that industry too
Its at 107% actually
Welcome - you are real Americans now ....... enjoy ;)
Making house more affordable will not help those who are in debt already.
There is enough housing don’t lie to people but the greed is eating them up
Certainly didnt get there without a little help.
I hope the housing market FREAKING PLUMMETS! they never learn and DON"T bail them out! The bankers got themselves into this they can get themselves out!
oy vey very antisemitic!
Not surprised. Tru-don’t
We spend too much on toilet paper.. too much time sitting on the throne because Facebook demands it
Canada numbah one!
Debt spiral central!
Housing supply scapegoat 😂
So mortgage debt is a bad thing? What about rising interest rates? Or rising home prices? What about dirty money in the real estate market in places like British Columbia and Ontario? What about red tape reduction at the municipal level for new housing starts? What about the 4 billion transferred from CMHC fees to Government coffers with no oversite as to how that money is spent.
decoupling from 33% of the annual wage to a supply and demand market has sealed the fate of ever owning a home again .
They have "universal healthcare," right? So, what's the problem?
They're running out of other people's money to support it.
Couple of my friends need to sell and claim bankruptcy
Oh yes when you pump billions into stimulation and lending out at 1% interest rates and BOC and Gov said no rate hikes at least til fourth quarter of 2024. But, Here we are at 500 basis point hike and the crash will be worse than US housing bubble of 2007 2008. Egads!
You can thank the Liberal Party 100%
Go Canada go. More taxes and more debt accumulated makes us no way to grow
Money laundering, foreign buyers, incompetant govt.
City zoning laws, local NIMBY's.
Come to America.
I’m seriously thinking to moving to Atlanta. They offered me 140K salary $USD compared to my lousy 80k $CAD.
Canada is a Joke.
Oh sure, and get shot?
@@MH-UA-cam-Controlled You are a typical Caucasian Canadian who never ever left Canada. Get out more buddy!
What makes you think I had live in the ghettos as a professional.
@@MH-UA-cam-Controlled you’re just likely to get shot or stabbed here in Canada by a junky.
If only Canada and the US agree to ease mutual work restrictions
Lack of leadership.
Can you send this to Freeland and Trudeau, they keep telling lies.
Why is this dude smiling during the entire interview. Ain't a laughing matter.
What is she on? Seems stoned.
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14 Years of extremely low interest rate was the rain. What we are dealing with is the mud. There's nothing new under the sun.
Rich people in canada are doing a horrible job managing our economy. Its y’all who invests all the money. Do better
It's not rich people managing the economy, it's your Liberal Gov't wreaking havoc and it's only going to get worse. It's a coordinated effort as no sane person or group could cobble that many bad decisions together and make things worse.
This is a scripted interview if I’ve ever heard one
The Trudeau liberals have the answer. Bring in higher carbon taxes.
and 500,000 immigrants annually.
I just told my renter I am reducing my expenses and have decided to move into the townhouse I was renting. He is devastated and pissed off. If the Bank wants me to pay $250 more per month and increase the years on my mortgage why would I rent a house that costs me $2200 and collect $1700. The blame and anger is looking at the wrong people.
This is just showing the rules are always changing and people at the top have complete control over our lives. The baby boomers excuses of people are paying too much for our phones just doesn't explain it anymore.
Without production the ship is sinking. Housing situation is example of pure corruption
Canada is way over rated country with one of the highest cost of living on the planet, real estate ,BC and Ontario highest in North America !