{"id":11298,"date":"2019-01-06T11:11:07","date_gmt":"2019-01-06T19:11:07","guid":{"rendered":"http:\/\/www.roryc.ca\/blog\/?p=11298"},"modified":"2019-01-04T09:58:08","modified_gmt":"2019-01-04T17:58:08","slug":"higher-debt-rising-interest-rates-fading-real-estate-wealth-are-expected-to-hinder-economic-growth","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2019\/01\/higher-debt-rising-interest-rates-fading-real-estate-wealth-are-expected-to-hinder-economic-growth\/","title":{"rendered":"Higher Debt, Rising Interest Rates &#038; Fading Real Estate Wealth are Expected to Hinder Economic Growth"},"content":{"rendered":"<p style=\"text-align: justify;\">Canadians today are having to spend the highest share of their disposable incomes on mortgage payments since the early-\u201990s, when the market was reeling from a collapse in prices.<\/p>\n<p style=\"text-align: justify;\">That may lead some to speculate history is about to repeat itself, but a Hot Charts report from National Bank notes a key difference this time around.<\/p>\n<p style=\"text-align: justify;\">\u201cBack in the early 1990\u2019s, interest accounted for the bulk of mortgage payments. But as today\u2019s Hot Charts show, capital repayments now account for almost half of mortgage payments,\u201d writes Krishen Rangasamy, a senior economist at National Bank.<\/p>\n<p style=\"text-align: justify;\">The upshot is borrowers are building equity, and therefore in a better position to shoulder shocks.<\/p>\n<p style=\"text-align: justify;\">\u201cThat\u2019s not to say we\u2019re complacent about downside risks to the Canadian economy,\u201d Rangasamy adds, noting higher debt servicing, rising interest rates, and fading real estate wealth are expected to hinder economic growth next year.<br \/>\n<a href=\"https:\/\/www.roryc.ca\/blog\/?attachment_id=11299\" rel=\"attachment wp-att-11299\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone  wp-image-11299\" src=\"https:\/\/www.roryc.ca\/blog\/wp-content\/uploads\/2018\/12\/canadian-housing-market-debt-234x288.jpg\" alt=\"\" width=\"525\" height=\"647\" \/><\/a><br \/>\nThe National Bank report came on the heels of the publication of Statistics Canada\u2019s third quarter national balance sheet and financial flow accounts.<\/p>\n<p style=\"text-align: justify;\">According to the national statistical agency, Canadians are directing 14.5 percent of household disposable incomes towards debt servicing, which includes both interest and principal payments.<\/p>\n<p style=\"text-align: justify;\">\u201cBlame higher borrowing costs for this increase because interest payments now account for 7.2% of disposable income, a multi-year high,\u201d says Rangasamy.<\/p>\n<p style=\"text-align: justify;\">Total mortgage loans owed by borrowers in Canada declined by $1.2 billion, representing the third quarterly decline in a row.<\/p>\n<p style=\"text-align: justify;\"><a href=\"https:\/\/www.livabl.com\/2018\/12\/heres-canadas-appetite-mortgage-debt-housing-crash.html\">Here&#8217;s Why Canada&#8217;s Appetite for Mortgage Debt Doesn&#8217;t Signal Another Housing Crash<\/a> by Josh Sherman | Livabl<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Canadians today are having to spend the highest share of their disposable incomes on mortgage payments since the early-\u201990s, when the market was reeling from a collapse in prices. That &hellip; [<a href=\"https:\/\/www.roryc.ca\/blog\/2019\/01\/higher-debt-rising-interest-rates-fading-real-estate-wealth-are-expected-to-hinder-economic-growth\/\">read more<\/a>]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[],"class_list":["post-11298","post","type-post","status-publish","format-standard","hentry","category-mortgage"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Higher Debt, Rising Interest Rates &amp; Fading Real Estate Wealth are Expected to Hinder Economic Growth &#8226; Rory C Real Estate | Oakwyn Realty<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.roryc.ca\/blog\/2019\/01\/higher-debt-rising-interest-rates-fading-real-estate-wealth-are-expected-to-hinder-economic-growth\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Higher Debt, Rising Interest Rates &amp; Fading Real Estate Wealth are Expected to Hinder Economic Growth &#8226; Rory C Real Estate | Oakwyn Realty\" \/>\n<meta name=\"twitter:description\" content=\"Canadians today are having to spend the highest share of their disposable incomes on mortgage payments since the early-\u201990s, when the market was reeling from a collapse in prices. 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