The growth of household debt in Québec offset by an increase in the value of assets

Québec, February 3, 2015 – Between 1999 and 2012, the average debt of Québec households doubled, increasing from $35,100 in 1999 to $69,200 in constant 2012 dollars. Meanwhile, the average value of assets grew considerably, from $295,900 to $544,800. However, there was no increase in household debt in Québec, as the debt-to-asset ratio remained stable at about 12%. Debt-to-asset ratios for Québec households tend to compare favourably to those of Ontario and Canadian households.

Nevertheless, the balance sheet of Québec households could deteriorate in the event of a sharp devaluation of property prices and a significant increase in interest rates. These results are drawn from an article published today by the Institut de la statistique du Québec in the bulletin Données sociodémographiques en bref.

The distribution of disposable income and wealth don’t always go in the same direction

Cross-tabulating the distribution of disposable income with that of wealth shows that about four out of five households have corresponding income and wealth levels, for example a lower income accompanied by lower financial wealth. However, the analysis also reveals that one out of five households do not have matching income and wealth levels.

Among those households, some earn relatively high incomes, but have modest wealth. These are usually couples with children, households with more than one income, and people with high education levels, who are younger and who have a mortgage. In contrast, and as expected, among households with lower incomes but a high level of financial wealth, the data reveal a larger number of retirees, mortgage-free homeowners, unattached individuals, and people who have received inheritances.


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Sources:

  • Marc-André Gauthier
    Research Agent
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    Institut de la statistique du Québec
  • Stéphane Crespo
    Research Agent
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    Institut de la statistique du Québec
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