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.
As a collection agency with offices in Edmonton, Calgary and the GTA we are watching with keen interest the unfolding of events with respect to these phenomenon and their impact (or lack thereof) on Canadian credit markets.
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.