Canadian household debt ratio dips, but unlikely to change BoC's view

Canadian household debt ratios fell 0.3 ppts to 163.3% in the first quarter of 2015, from the prior quarter's record level. The ratio fell in Q1 for the sixth consecutive year, but the average drop in the prior five years was 0.9 ppts. Fortunately, there's little need to fret about households' ability to carry all that debt, as the household debt service ratio fell to a record low of 6.7% in the quarter.

While the debt ratio fell slightly in Q1 there's nothing here to change the Bank of Canada's view, which they made clear in yesterday's Financial Stability Review, that high household debt is a risk to financial stability, notes BMO Capital Markets 

Household assets continued to appreciate strongly. Household net worth hit an all-time high of 767% of disposable income-up a chunky 19 ppts from the prior quarter amid higher home prices, and gains in financial assets driven in part by appreciation in foreign assets due to weakness in the Canadian dollar. Canadian households have $5.63 of assets for every $1.00 of debt.