\n<\/p>\n
\u201cA potential explanation for this phenomenon is that consumers with mortgages in areas with high house price growth have been shielded from insolvency over the past few years by the growing value of their home (e.g. the ability to extract home equity to consolidate their debts or sell their home to pay their debts),\u201d it states. \u201cConversely, non-mortgage holders in hotter housing markets have missed out on the benefits of house price appreciation, while still bearing the costs associated with living in affordability-challenged areas (e.g. higher rents).\u201d<\/p>\n
In line with this possible explanation, the memo says, is that in British Columbia and Ontario, home to the pricey real estate markets of Vancouver and Toronto, the share of insolvencies filed by mortgage-bearing consumers had fallen sharply. Meanwhile, in the rest of Canada, those insolvencies had remained steady.<\/p>\n
Recent public-opinion surveys have suggested that consumers have not forgotten about the risks posed by rising rates either.<\/p>\n
A Royal Bank of Canada \u201cHome Buying Sentiment Poll\u201d found 45 per cent of those polled were concerned about interest rates in the coming year. And a recent poll<\/a> conducted by the Credit Counselling Society, a non-profit that aims to help consumers manage their finances better, found that 31 per cent of Canadians it surveyed were having trouble paying down their debt, even with interest rates so low.<\/p>\n \u201cIf consumers don\u2019t make a concerted effort to reduce their \u2026 non-mortgage debt over the next two to four years, and then rates start to go up \u2014 that could have a material impact on mortgage rates, which could have an impact on rental rates \u2014 then consumers will put themselves in difficulty,\u201d said Scott Hannah, chief executive of the CCS, in an interview. \u201cSo that\u2019s the challenge that we throw out there for consumers is, if you don\u2019t get your financial house in order over the next three to five years, pay off your consumer debt, set aside three to six months\u2019 worth of living expenses for emergencies, you\u2019re going to be susceptible to the next thing, whatever that is.\u201d<\/p>\n<\/div>\n\n Article content continued \u201cA potential explanation for this phenomenon is that consumers with mortgages in areas with high house price growth have been shielded from insolvency over the past few…<\/p>\n","protected":false},"author":2,"featured_media":6802,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23],"tags":[],"class_list":["post-6801","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business-news"],"_links":{"self":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts\/6801","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/comments?post=6801"}],"version-history":[{"count":0,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts\/6801\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/media\/6802"}],"wp:attachment":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/media?parent=6801"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/categories?post=6801"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/tags?post=6801"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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