{"id":9593,"date":"2018-07-04T11:11:19","date_gmt":"2018-07-04T18:11:19","guid":{"rendered":"http:\/\/www.roryc.ca\/blog\/?p=9593"},"modified":"2018-07-04T13:11:54","modified_gmt":"2018-07-04T20:11:54","slug":"downside-of-the-cooler-housing-market-restrained-growth-in-mortgages-outstanding","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2018\/07\/downside-of-the-cooler-housing-market-restrained-growth-in-mortgages-outstanding\/","title":{"rendered":"Downside of The Cooler Housing Market Restrained Growth in Mortgages Outstanding"},"content":{"rendered":"<p style=\"text-align: justify;\">Canada has some of the highest household debt levels in the world, but last week a new report from Statistics Canada found that that could be starting to change.<\/p>\n<p style=\"text-align: justify;\">The country\u2019s household debt-to-income ratio fell to 168% in the first quarter of 2018, after reaching a historic high of 170.5% in Q3 2017.<\/p>\n<p style=\"text-align: justify;\">\u201c[The decline hints] that [the] household debt-to-income ratio might have turned a corner last year after increasing fairly steadily for decades,\u201d writes RBC senior economist Robert Hogue, in his latest note.<\/p>\n<p style=\"text-align: justify;\">The decline has everything to do with a new mortgage stress test, which came into effect on January 1, according to Hogue. The test has cooled the housing market significantly, leading to month after month of year-over-year sales drops and prices. The cooler market restrained growth in mortgages outstanding to its weakest rate in 17 years last quarter \u2014 just 4.5%.<\/p>\n<p style=\"text-align: justify;\">But there is a slight catch to this good news. Canadian households\u2019 net worth also dipped slightly in the first quarter of 2018, as the values of their property started to fall.<\/p>\n<p style=\"text-align: justify;\">\u201cThe dip in households\u2019 net worth resulted from a marked slowdown in asset growth,\u201d notes Hogue. \u201cHousehold assets grew at their slowest pace in nine years in the first quarter, as a cooling in Canada\u2019s housing market curbed the growth of real estate assets significantly.\u201d<\/p>\n<p style=\"text-align: justify;\">Households\u2019 real estate holdings rose by just 1.3% in the first quarter, representing the weakest increase since the 2008-2009 recession.<\/p>\n<p style=\"text-align: justify;\">Still, the drop in household assets isn\u2019t something to be overly concerned about, according to Hogue. Or at least, not yet.<\/p>\n<p style=\"text-align: justify;\">\u201cThe flip side of a cooler housing market &#8230;.. is that slower growth in the value of real estate holdings tempers the asset side of the ledger and causes households\u2019 net worth to erode slightly,\u201d explains Hogue. \u201cStill, this shouldn\u2019t be a big worry at this stage considering how much both assets and net worth increased over the past several years.\u201d<\/p>\n<p><a href=\"http:\/\/news.buzzbuzzhome.com\/2018\/06\/housing-market-cooler-canadians-taking-less-debt-one-downside.html\" target=\"_blank\" rel=\"noopener\">The Housing Market is Cooler &amp; Canadians are Taking on Less Debt &#8211; But There is One Downside<\/a> by Sarah Niedoba | Buzz Buzz Home<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Canada has some of the highest household debt levels in the world, but last week a new report from Statistics Canada found that that could be starting to change. The &hellip; [<a href=\"https:\/\/www.roryc.ca\/blog\/2018\/07\/downside-of-the-cooler-housing-market-restrained-growth-in-mortgages-outstanding\/\">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":[8],"tags":[],"class_list":["post-9593","post","type-post","status-publish","format-standard","hentry","category-market-updates"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.7 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Downside of The Cooler Housing Market Restrained Growth in Mortgages Outstanding &#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\/2018\/07\/downside-of-the-cooler-housing-market-restrained-growth-in-mortgages-outstanding\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Downside of The Cooler Housing Market Restrained Growth in Mortgages Outstanding &#8226; Rory C Real Estate | Oakwyn Realty\" \/>\n<meta name=\"twitter:description\" content=\"Canada has some of the highest household debt levels in the world, but last week a new report from Statistics Canada found that that could be starting to change. 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