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10 Nov

Optimism: point, counterpoint

General

Posted by: Robyn McLean

Some insight on today’s market conditions from our friends at First National.

Nov 9, 2020
First National Financial LP

Current optimism about Canada’s housing market appears to be at odds with two recent surveys that check Canadians’ attitudes toward their financial situations.

The October market is shaping up to be a “carbon copy” of September according to well known economist Robert Hogue.  Early numbers from across the country indicate little cooling, with sales running 23% to 37% higher than a year ago.  Detached, single family homes remain the hottest commodity.

However, the latest quarterly survey by insolvency consultants MNP suggests those buyers may be coming from a shrinking pool.  Broadly speaking, the firm’s latest Consumer Debt Index indicates nearly half of Canadians (47%) say they are $200 or less away from insolvency.  That number includes 26% who are already insolvent.  Key groups such as renters, women and millennials are most likely to say that their debt situation has gotten worse.

Employment is a major concern.  Younger people and low income earners have been hardest hit by job losses triggered by COVID-19 restrictions.  More than 40% of the women surveyed fear that they, or someone in their household, could lose their job because of the pandemic.

The survey also suggests nearly a quarter of households earning more than $100,000 a year say they can’t meet their debt obligations. Fifteen percent of these households say they are already insolvent.

The latest Financial Hardship Report from credit tracker TransUnion suggests 48% of Canadians have seen their finances hurt by the pandemic and 63% are concerned about their ability to pay current bills and loans.