Smug Canadians Ignoring Looming “POP” In Housing Bubble (+2K Views)

Lorimer Wilson June 14, 2015 Comments Off on Smug Canadians Ignoring Looming “POP” In Housing Bubble (+2K Views) 2,940 Views

Canadians are using their appreciating homes as ATMs (as Americans did in the early 2000′s before their housing crash) and the funds being borrowed are not just for home improvements, but in many cases to fund living and lifestyle expenses.

The above edited excerpts (and what follows) come from an article* by Danielle Park, CFA (jugglingdynamite.com) originally entitled Canada’s Lust For Home Equity Lines Of Credit.

Canadian household debt rose to a fresh all-time high in April above 1.8 trillion. Trustees in bankruptcy are warning that they have never seen so many 2nd mortgages and Home Equity Lines of Credit (HELCO) on Canadian household balance sheets as illustrated in the chart below.

Of course, the Canadian Bankers Association says it’s not worried, insisting that Canadians are responsible borrowers and that banks are prudent lenders. (Sure they are)…
‘Twas always thus:

“-overconfidence seldom does any great harm except, when, as, and if, it beguiles its victims into debt.” -Irving Fisher, Economist, The debt-deflation theory of Great Depressions, 1933

*http://jugglingdynamite.com/2015/06/11/canadas-lust-for-home-equity-lines-of-credit/

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