Canadian Household Debt Rises as Mortgage Borrowing Returns Non Mortgage Credit Slows
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Canadian household debt grew in November 2024, rising by $13 billion to reach $3.03 trillion, with mortgage borrowing driving much of the increase. Although mortgage debt accelerated to 4% annual growth, it remains well below the 5-year average. This surge in mortgage borrowing reflects a return of demand for real estate credit.
Conversely, non-mortgage credit growth slowed, suggesting Canadians are less willing to take on other types of debt. This shift could indicate a concentration of economic activity in housing, which may reduce the economy’s resilience to external shocks.
Policymakers have continued to incentivize mortgage borrowing despite concerns over the long-term stability of a housing-dependent economy. While this strategy may boost short-term growth, it risks exacerbating vulnerabilities related to housing market fluctuations.
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