Households in Greater Vancouver are the most indebted among the country’s census metropolitan areas (CMAs), according to a report from the Canada Mortgage and Housing Corporation (CMHC) released Thursday.
The debt-to-income ratio reached 242% in the British Columbia metropolis in the second quarter of 2018, compared to an average of 170% in Canada.
According to the federal agency, at the national level, the mortgage accounts for about two-thirds of this debt and climbs to nearly three-quarters in Vancouver.
“The pace of price growth has played out,” says economist Tania Bourassa-Ochoa at CMHC. House prices have risen much faster than people’s incomes.”
High debt in cities in British Columbia
For the Abbotsford and Mission area in the Fraser Valley, the household debt ratio is 208%, ranking second among Toronto’s CMAs.
In Victoria, this rate rises to 189%, making the capital of British Columbia fourth in Canada.
Brent Weimer, an analyst at CMHC, points out that recent interest rate hikes could have an impact on these over-indebted households.
“Households with the highest levels of debt would be the hardest hit if interest rates continue to rise,” he says.
Emmy Skylar started working for Debate Report in 2017. Emmy grew up in a small town in northern Manitoba. But moved to Ontario for university. Before joining Debate Report, Emmy briefly worked as a freelance journalist for CBC News. She covers politics and the economy.