Debt among Canadian millennials at record levels, while earnings haven’t kept up: RBC report
Debt among Canadian millennials at record levels, while earnings haven’t kept up: RBC report
Canadian millennials are more likely to face the brunt of a wavering labour market as most face mounting debt with an income that fails to keep up with inflation, according to a report from RBC Economics.
Canadian millennials are more likely to face the brunt of a wavering labour market as most face mounting debt with an income that fails to keep up with inflation, according to a report from RBC Economics.
The report released on Wednesday said Canadian millennials are more vulnerable to serious financial burdens if job losses continue to rise in their age bracket. July marked the third consecutive month Canada’s overall unemployment rate has increased; the rate stood at 5.2 per cent in May before it rose to 5.5 per cent in July, according to Statistic Canada.
The data, based on changing average mortgage rates between January 2019 and January 2023, found older millennials between the ages of 35 and 44 had an average debt-to-income ratio of 250 per cent in 2019. Approximately half of what Canadians in the same age group reported having in 1999 reported, which was 150 per cent.
Younger millennials are also reporting above that nearly 25-year statistic, as their debt-to-income ratio is at 165 per cent.
Additionally, millennials who own a home are likely to see a 25 per cent increase in monthly mortgage payments by 2024 amid interest rate hikes, significantly affecting millennials who’s earnings haven’t kept up with the pace of their increasing debt. Since the start of the pandemic, hourly wages have grown by 12 per cent, the report says, which is less than half of the average five-year fixed mortgage payment.
In turn, boomers, who account for those aged 65 and older, are less vulnerable to interest rate hikes since the majority no longer have mortgage debt. As for the 14 per cent that still do, the average balance is half the size of a millennial mortgage.
As millennials continue to struggle post-pandemic with the rising cost of living and housing crisis, Prime Minister Justin Trudeau extended a message to younger Canadians during his cabinet retreat.
"To young Canadians, I want to say something: You've had two crucial years of adulthood dramatically interrupted by COVID, and then you were hit by global inflation and increased interest rates,” Trudeau said to reporters on Wednesday.
"We owe it to you to take action, so you can fully benefit from the promise of Canada,” he continued.
Housing affordability was among the core topics discussed during the three-day retreat in Charlottetown, P.E.I.. However, the prime minister did not announce any new plans to tackle the housing crisis on Wednesday.
According to Statistics Canada, the average debt including mortgage debt, credit cards and student loans among other debts, for Canadians between the ages of 35 to 44 was $105,100 and $69,500 for those under 35.
With files from The Canadian Press.
They seem hell-bent on tearing us down at this rate and it's becoming very hard to not take it personally. Not sure what the endgame is, but I really don't care what happens to the older generations at this point. I'm very fortunate to have had pretty well paying jobs overall and saved like an absolute mother fucker and eventually got a small ass condo in a desirable area - I'm renewing my mortgage and I have to put down $50K to just keep the same monthly payment. But I won't give them any more interest than I have to - they can get fucked.
Then they felt it necessary to lay a bunch of us off on top of it to add insult to injury.
To anyone else with less, I seriously don't know how you put up with this shit. I can barely stand it with what I have - it's still a far cry from where we want to be.
Housing costs for anyone entering the market are basically out of reach. I don't know how anyone without an incredible paycheque or generational wealth would do it.
Looking at the listings, there's a three bedroom condo up for $200,000. Recent sales in the same building suggest that is in line with the market. Rough math says a mortgage will be around $1,100 per month.
The average paycheque can make it work. Better if you bring a friend. Seems like a lot of money to tie up in an unproductive asset, though.
Of course, nobody would dare tie up so much money in an unproductive asset if they knew of a good productive asset to buy instead; with its proceeds then able to pay the rent/mortgage. Trouble is that we've run out of ideas. Once upon a time we thought that if we pushed people into university research labs that research would lead to new ideas, thus higher incomes from the newfound productivity that came from those ideas. People heard the university part, and the higher income part, but forgot the critical middle.
Real estate is where money goes to die. The only way out is to see productive assets become the focus again, but it's not clear is there is any ideas left, or if people are willing to get creative. An interesting conundrum.
Honestly? By not taking part.
I've just plain given up on attaining the old "life goals" and just going for things within reach. I don't care about family, a career, a home, or any of that sort of stuff.
Doesn't mean I'm unhappy. I enjoy my life pretty decently. But all that stuff that was considered necessary for a good life before? Fuck that shit, I'm out. I'll make do with what I have and be happy through my own means.
I'll admit that such a large shift in mindset isn't something just anybody can do, but it worked for me.
Did he forget the08/09 resession too? We go 1 steps forward...5 back. Or is it 10 at this point? I'm too depressed and anxious to revolt...sorry Gen Z...I'm tryn.
including mortgage debt
$105,100
Wait, wut?
It's because that's the average. A lot of millennials don't have a mortgage, because they can't afford a down payment.
That’s me. I don’t have a mortgage, and don’t have a down payment so instead I just pay my landlords mortgage and then some. The best part is I can get personal use evicted at any point and instead of actually gaining equity I get nothing but another 30 day extension of having a roof. And at this rate that looks like it’ll be forever. If my landlord decides to kick me out I’ll likely have to leave the city and therefor my job.
Yeah, this seems low. Unless almost nobody has mortgage debt. Because, surprise, most can't get into the market. So that would be pure student loans and credit card.
The banks have shockingly bad technology and staffing these days, so I'm halfway between thinking the numbers are doctored, or they just have no idea how to pull the data.
Wages should be increased at least 50% across the board to make up for stagnating wages since the 2008 crash for one. And then some more to make up for the recent cost of living hike that we've been facing.
But I know that's not how it works.
We should just go after the big rich motherfuckers who run all the companies investing in residential housing and those who control groceries and pharmacies and get them queued up next to a guillotine.
And in other news, water found to be wet and the sun to be bright.
This is the best summary I could come up with:
The report released on Wednesday said Canadian millennials are more vulnerable to serious financial burdens if job losses continue to rise in their age bracket.
Additionally, millennials who own a home are likely to see a 25 per cent increase in monthly mortgage payments by 2024 amid interest rate hikes, significantly affecting millennials who’s earnings haven’t kept up with the pace of their increasing debt.
Since the start of the pandemic, hourly wages have grown by 12 per cent, the report says, which is less than half of the average five-year fixed mortgage payment.
In turn, boomers, who account for those aged 65 and older, are less vulnerable to interest rate hikes since the majority no longer have mortgage debt.
As millennials continue to struggle post-pandemic with the rising cost of living and housing crisis, Prime Minister Justin Trudeau extended a message to younger Canadians during his cabinet retreat.
"To young Canadians, I want to say something: You've had two crucial years of adulthood dramatically interrupted by COVID, and then you were hit by global inflation and increased interest rates,” Trudeau said to reporters on Wednesday.
The original article contains 443 words, the summary contains 186 words. Saved 58%. I'm a bot and I'm open source!
just ditch your smartphone .
Perhaps I did it wrong. I was born in 1954, followed all the rules, went to school, got a job, got married, had kids. I was retired the first time I held a thousand dollars in my hands. Thanks to my youngest son and his wife's generosity I am living in the in-law suite in his and his wife's home. My expenses are my rent and whatever I spend on food and fuel for my vehicle. I have more expendable wealth than at any time in my life with less income. It is because I have all I need and do not buy more things.