There are a couple of things that are foundational wealth creators for the average Canadian family.
By far, the most important one is home ownership. The other is a small business and, in this province, that is often a farm or the home quarter. Old-time bankers will tell you that you’d be surprised at how many Saskatchewan businesses were financed on the strength of a loan against the home quarter.
That real estate is the primary tool for the average person to acquire financing beyond their basic credit card. It seems we were in a bit of a hurry to extend our leverage in the run-up to interest rates going up this spring.
A Statistics Canada report on household debt levels in Canada showed we were borrowing more. Almost all of the debt was funded with real estate as security. Residential mortgage values are now bumping against $2 trillion in Canada, up about $50 billion in the last six months alone.
All other household borrowing amounts to another $500 billion. In other words, property secures about 80 per cent of all our debt.
