Prior to this quarter’s downturn, Canadian households were seeing strong wealth growth beginning in early 2020. Now, we're seeing a record-breaking decline. StatCan_eng | realestate realestatenews housingmarket
, Canadian households are quite clearly feeling the squeeze. indicated that while Canada’s national net worth rose slightly by 0.2% between Q1 and Q2 of 2022, collective household net worth, household savings, and household financial assets are all on the decline — and home values are to blame.
The household savings rate fell to 6.2%, down from 9.5% in Q1. While seasonally adjusted household compensation grew by 2.0% in Q2, that was dampened by seasonally adjusted household consumption, which rose by 4.3% in Q2 due to inflated prices of goods and services. At the same time, household borrowing is on the up, with Canadian households taking on significant debt in these uncertain times. In Q2, households added $56.3B in debt, now owing $1.82 for every dollar of disposable income. This is a near-record. StatCan also notes that given the current interest rate environment, more Canadians are opting for variable rate mortgages over fixed.
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