Toronto real estate. Canadians are more cautious with debt

Consumers are more “prudent” with credit after racking up a record amount of household debt earlier this year. Gerry McCaughey, chief executive officer of the Canadian Imperial Bank of Commerce, said he is confident that Canadians remain capable of keeping up with their payments – despite much hand-wringing in recent months about skyrocketing household debt.

The slowdown in mortgage lending is positive even though it means weaker loan growth for banks. “I think the consumer probably is taking a pause and acting in a prudent fashion, and that’s what’s driving this slowdown in the housing market,” McCaughey said. “And I think that is a good thing because, as I say, some day (interest) rates will rise back to more normal levels. It would be a good idea to have the level of total debt at a more manageable state.” 

Statistics Canada said on Wednesday that Canadian retail sales fell unexpectedly in July, suggesting Canadian consumers are no longer pulling their weight in the country’s economic recovery. The Star