DBRS says Canadians can withstand housing downturn, but debt a concern

Published on May 24, 2012; Published on May 24, 2012
The Canadian Press

Topics :: OTTAWA

OTTAWA — Credit rating agency DBRS says most Canadian households are capable of withstanding a sharp drop in home prices.

DBRS says the average household would be able to handle even a 40 per cent drop in the value of their home.

However, the rating agency says increasing household borrowing and stretched housing affordability is a concern.

The agency says faster debt accumulation relative to the economy as a whole or average household income has driven up both home prices and borrowing.

The result is reduced housing affordability, with pressure on day-to-day cash flow for average Canadian households, leaving them little room to deal with unexpected expenses.

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Comments

David

- May 24, 2012 at 17:03:47

Yes, because DBRS knows: 1) exactly how people will react in the face of an unpreceented and never-before seen finacial crisis that will elave them virtually bankrupt...that's how it always works; and 2) they wouldn't just be putting this fictional assessment out there well in advance so that when it happens people won't freak out. No, that wouldn't be right, would it?

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