(Bloomberg) -- Canadians are piling on debt to purchase property at the fastest pace in more than a decade amid a pandemic-driven housing boom.
Household mortgage debt grew by 1% in April to C$1.69 trillion ($1.4 trillion), Statistics Canada reported Friday in Ottawa. That’s the fastest pace since 2010. In absolute terms, residential mortgage credit was up C$17 billion during the month, the largest one-month increase ever.
Low borrowing costs, tight supply and increased demand for single-family homes during the Covid-19 pandemic have spurred bidding wars and a spike in home values across the country. Friday’s data shows just how much the boom in prices is fueling mortgage debt -- a major concern for policy makers.
The average sale price for a home in Canada has surged 38% to C$688,208 over the past year, according to data from the Canadian Real Estate Association.
Total credit to households was up 0.9% in April, the fastest gain since 2011, to C$2.49 trillion. While mortgage debt is soaring, Canadians have pared back on other types of debt since the start of the pandemic. Non-mortgage credit was up slightly in April but still remains below pre-pandemic levels.
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