Canadians are likely heeding the advice of lawmakers to limit their borrowing on homes, as growth in household debt has slowed to its lowest level in a decade, according to a report released Wednesday by CIBC.
The latest Household Credit Analysis Report claims that the third quarter of 2010 saw household credit levels slow to the lowest point since 2001. The pace of mortgage lending has also fallen to approximately 0.4 to 0.5 percent a month, noted CIBC Deputy Chief Economist Benjamin Tal.
"After rushing back to shop in 2010, consumers will take a well-deserved break in 2011," said Tal. "The softening in the monthly pace of job creation from an average of 31,000 in 2010 to 20,000 in 2011 will single-handedly slow growth in personal spending by more than 0.4 percentage points."
However, the propensity to spend will be equally important, Tal added. With increasing signals that monetary authorities wish to limit the risky level of housing credit, 2011 should see the beginning of a change in the balance of household debt.
