Canadians are spending record amounts on housing, putting themselves at much higher risk than before should home prices collapse or interest rates rise. Canada’s seasonally adjusted annual rate of residential investment, which includes home construction, significant renovations, and ownership transfer costs, hit $249.3 billion in the second quarter of 2021, with $67.9 billion spent during the quarter itself, according to Better Dwelling. Both amounts were new records and represented more than 10 percent of gross domestic product. Meanwhile, Canadian households spend a huge amount of income on debt payments, based on data from the Bank of International Settlements. Canada’s household debt service ratio in Q4 2020, at 12.4 percent, was much higher than that of any other G7 country, outpacing the UK’s around 9 percent and the 7.6 percent of the United States and Japan. Of the nearly $2.48 trillion of debt carried by Canadians in Q4 2020, close to $1.66 …
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