(Bloomberg) – Canadians are piling up debt to buy property at the fastest pace in more than a decade amid a pandemic-fueled housing boom.
Household mortgage debt grew 1% in April to Cdn $ 1.69 trillion ($ 1.4 trillion), Statistics Canada reported Friday in Ottawa. That’s the fastest pace since 2010. In absolute terms, residential mortgage credit increased C $ 17 billion during the month, the largest increase in a month to date.
Low loan costs, tight supply and increased demand for single-family homes during the Covid-19 pandemic have led to bidding wars and an increase in home values across the country. Friday’s data shows how much the price boom is fueling mortgage debt, a top concern of policy makers.
The median sales price of a home in Canada has risen 38% to C $ 688,208 over the past year, according to data from the Canadian Real Estate Association.
Total household credit increased 0.9% in April, the fastest increase since 2011, to C $ 2.49 trillion. While mortgage debt is increasing, Canadians have reduced other types of debt since the start of the pandemic. Non-mortgage credit increased slightly in April, but still remains below pre-pandemic levels.
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