Canadians are taking on mortgage debt at more than double the historic rate.
The total value of residential mortgages rose by 1.2% to $1.73 trillion in June, according to the latest data from Statistics Canada. That’s the fastest monthly increase in loans borrowed for real estate purchases since 2007.
The rise in mortgages is evidence of Canadians’ demand for more living space during the pandemic, which sent sales and prices to record highs.
Driven by lower interest rates, the total amount of real estate debt outstanding across Canada has now risen 9.2% in the past year, the largest increase since 2008.
In 2007, a housing bubble formed in North America that preceded and contributed to the 2008-09 financial crisis.
However, Statistics Canada said the heightened level of borrowing activity seen today is likely to slow in coming months alongside Canada’s housing market, where sales volumes have fallen for the past four months.
