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.