More than a third of Canadian homeowners polled in a recent survey say they were caught short at least once in the past year without enough money to cover their expenses.
According to Manulife Bank of Canada’s spring debt survey, four per cent of respondents said they found themselves in that situation almost every month, while 10 per cent said it happened to them a few times in the past 12 months. Another 23 per cent said it happened once or twice in the past year.
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The remaining 63 per cent of the survey respondents said they had never been caught without enough money in their bank account to pay their bills.
The survey also found that the average mortgage debt carried by respondents was $181,000. That is up from an average of $175,000 reported in a similar poll by Manulife last autumn.
Those debt loads varied by city, with the average mortgage debt among respondents highest in Vancouver, with an average of $259,000. In Calgary and Edmonton, the average mortgage debt was $217,000, while it stood at $194,000 in Toronto, Manulife said.
“That’s consistent with other data that we’ve seen showing that mortgage credit growth continues to push up total household debt,” said Frances Donald, senior economist at Manulife Asset Management.
Donald sees two big reasons for that rise in mortgage debt. First is the low interest rate environment in Canada now. “That’s affecting every Canadian across every province,” she said.
The second reason she sees is rising house prices in some cities, particularly in Vancouver and Toronto.
“This is not as specific to the entire country, but it is contributing to why we see higher debt levels in places where house prices have been growing more quickly.”
Rick Lunny, chief executive of Manulife Bank of Canada, said a significant portion on respondents indicated they are not planning for their retirement, but are hoping to spend what they’ve made on their home to fund their post-work life.
The poll surveyed 2,373 Canadian homeowners in all provinces between ages 20 to 59 with household income of $50,000 or more. The survey was conducted online by Environics Research between Feb. 3 and Feb. 20, 2016. National results were weighted by province, income and age.
May 26, 2016