CANADIAN IMMIGRATION NEWS

Canadian owner’s equity remains strong despite US slump

Friday, 4 January 2008

It is not hard to see why Canada remains such a popular country with immigrants, especially when looking at the latest findings on owner's equity.

Ten years ago, the average Canadian had 66% equity in their home vs. 57% in the United States. Since then, however, the two paths have diverged dramatically as information in the national balance sheet accounts from Statistics Canada released recently shows a striking contrast between the domestic demand environments in Canada and the U.S.

While owners' equity has fallen steadily to just 50% in the US - a record low for the series (which began in 1952, at 81%) - owners' equity in Canada, has risen through the recent housing boom, to reach an all-time high of 72% (series only goes back to 1990), as Canadian borrowing has ramped up less quickly than home values.

The explanation for this rise in owner’s equity in Canada is attributed to the fact that Canadians have historically carried less debt on their homes than Americans. The lack of mortgage interest deductibility in Canada, as well as a greater innate Canadian conservatism is presumed to be some of the reasons.

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