Consumer Delinquencies Reach All Time Lows!

Equifax Canada’s March Consumer Credit Trends Report released April 24, 2013 finds there was moderate growth in total consumer indebtedness (excluding mortgage debt), year-to-date through March 2013 with an increase of 3.9 per cent to $500.8 billion from $497 billion during the same timeframe in 2012.

The 90-plus day delinquencies for all credit products (excluding mortgages) has decreased by 13.4 per cent from the same time period in 2012 to a moderate 1.2 per cent, an all-time low. This rate was as high as 1.8 per cent during the height of the recession.  Late-stage delinquency rates continue to show improvement, especially in the energy-rich economies of Edmonton and Calgary as well as in Vancouver and Ottawa.  A simpler way to encapsulate the improvement in delinquency rates is to recognize that delinquent accounts have decreased by 1/3 in comparison to levels realized during the Great Recession of 2009.

The biggest threat to consumer balance sheets continues to be property values. With outstanding mortgage balances continuing to grow at a 5 per cent annual rate, households as well as lenders remain vulnerable to any sudden change in home values.