VANCOUVER (NEWS1130) - It appears Canadians are finally getting the message about debt. CIBC Economist Benjamin Tal says spending habits have been changing:
"If you look at the overall trend over the past few quarters you really can sense Canadians are getting the message from the
Bank of Canada. Basically, we have too much debt and we have to do something about it. And that's a good thing".
He says consumer debt is no longer growing faster than income; the rate is about even. However, debt still outpaces income when you include mortgage numbers.
"We know that the housing market is still booming, especially in Vancouver, and we know that mortgage credit continues to go up," he explains. "But if I'm right, and this housing market will stagnate, or level off over the next year or two, this means that even the mortgage part of the equation will start slowing down"
Tal says from a long-term perspective, this is a good thing for the economy. The average debt-to-income ratio in Canada is nearly 150 per cent.
He says that percentage doesn't necessarily need to shrink, but it needs to stop growing.