House

Canada’s Household Debt Expected To Inflate

The economy of Canada is going strong according to experts but the central bank seems to have been placed on hold which could result to an increase in the current household debt of the country. This will impact residents and every profession including DUI lawyer because these are the prime consumers of Canada.

BMO Global Asset Management’s director, Fred Demers, said that consumers put a stop to their spending especially with home and vehicles in 2018 but it is expected to pick up pace for this year. He added that there are many reasons for the resumption of consumer purchases including a strong labour market, investment returns are getting better, the housing market are on a roll and the stocks market reached a record high.

Demers added that it is possible to see consumers purchasing big time again. This is not a good sign though because people are adding on their household debt yet the when the dynamics is considered, it is the best time to do so compared to waiting for another year or so. This is because the rates are declining instead of increasing.

Starting in 2012, home sales have reached a record low because the interest rates are higher and the lending rules are stricter than before. This impacted the real estate market negatively. All over the country, automobile sales are also not doing better. Since the recession, sales have dropped once more in 2018. This shows in the slowing growth of the household credit with only 3.4 per cent increased this May. This number is the weakest of the yearly record since 1983.

The housing market in Canada is already starting to recover for some parts of the country especially east Manitoba. The Canadian Real Estate Association showed an increase of 3 per cent in Greater Toronto Area until the month of June based on the last six months. Gains are increasing even faster for Montreal and Ottawa with an increase of 6.4 per cent and 7.6 per cent.

The main worry for everyone including DUI lawyer in the country is the growing household debt which impacts the value of the Canadian dollar.