According to Equifax Canada’s most recent report on consumer credit conditions, continued growth in the housing market and new car loans led the charge in speeding total consumer debt up by 3.8 percent to $2,041 trillion in the Q3. Compared to the third quarter of 2019. Total average consumer debt rose to $74,897, up 3.3 percent.
In contrast to Q3 of 2019, mortgage balances increased by 6.6 percent, and the average new mortgage loan amount exceeded $300,000 for the first time. New car loans were also up 11.7 percent compared to the same period last year, despite the pandemic. During the quarter, average credit card spending returned close to pre-COVID levels, but an increase in the average amount of payment resulted in overall credit card debt remaining at Q2 levels.
Homebuyers are largely the reason the company has crossed the $2 trillion thresholds, said Rebecca Oakes, Equifax Canada’s Advanced Analytics AVP. In the last few months, car sales have rebounded as well. There has been a temporary shortage of vehicle availability in some areas with producer and auction house shutdowns. As demand exceeds supply, this, in turn, has resulted in an increase in car prices. Speculation in the sector suggests that the pandemic may also have a short-term impact on car demand as consumers shift away from public transport. In four years, average auto loan amounts have increased to their highest level.
Since the pandemic started, more than 3 million customers have opted for payment deferrals at some point. Advancements in the labor market, coupled with certain customers reaching the end of the accepted lender deferment periods, resulted in less than half of the active deferment period at the end of September. Deferral accommodations did not stop consumers from seeking new credit; in Q3 2020. Approximately 12% of new credit products were opened to consumers who had some form of deferral in their credit file.
For non-mortgage debt, the 90+ day delinquency rate plunged to 0.98 percent-the lowest level since 2014.