Coming Canadian Housing Crash??

A really interesting number in this article.
The central bank estimates there was nearly $1.4-trillion in total household credit outstanding in October, the most recent data available, up from $1.3-trillion a year earlier.

Much of the growth stems from mortgage debt, which stood at roughly $950-billion in October, compared with less than $890-billion a year earlier.


reportonbusiness.com: globeinvestor.com - Holiday spending boosts debt levels

Out of curiosity, I wanted to find out what the total amount of debt in the US was in 2007.

I found a number in this article
http://www.crown.org/LIBRARY/ViewArticle.aspx?ArticleId=762


The total overall household or personal debt outstanding in the United States increased by another trillion dollars to 13.8 trillion dollars in 2007.

The Federal Reserve gathers data on all reported funds on a monthly basis. The two main components of household debt outstanding are mortgage debt outstanding (2007 total = $10.5 trillion) and consumer credit (2007 total = $2.6 trillion).

These numbers are from the Central Banks of Canada and the US. Now, Canada's population is about 10 times smaller than the US's. If you divide 13.8 by 10, you get 1.38. And 10.5 trillion divided by 10 is about 1.05 trillion. Canada is treading in very scary waters with its current amount of household debt.

Even more scary is when you look at GDP per person.
Canada's GDP per person is about 39,000 while the US is about 47000. Therefore, Americans should be, in theory, better able to handle such debt because of their bigger economy. There are many who think the US housing crash can't happen in Canada. I'm scared that this wishful thinking is one of the main reasons is hasn't yet.