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Canadians’ debt to income ratio hits new high at 163.3%

Leverage ratios among Canadian households increased to a record in the fourth quarter as disposable income grew more slowly than borrowing.

Credit-market debt including mortgages, consumer credit and non-mortgage loans grew to 163.3 percent of disposable income, from a revised 162.7 percent in the third quarter, Statistics Canada said Thursday in Ottawa. Mortgage debt, which accounts for about two thirds of the total, climbed 1.2 percent on a seasonally adjusted basis.

The cheapest mortgages in decades and sustained growth in Canada’s job market are encouraging consumers to load up on debt. Five-year conventional mortgage rates fell to 4.74 percent last month, the lowest in Bank of Canada figures dating to 1975. The statistics agency reports jobs numbers Friday.

The debt-ratio data was compiled before the Bank of Canada cut its benchmark interest rate in January to cushion the economic effects of a shock from weaker oil prices.

Canadian new home prices fell 0.1 percent in January from the previous month, led by declines in Toronto as builders offered promotions to spur sales, Statistics Canada reported. The data don’t include condominiums. Prices were up 1.4 percent from the same month a year earlier.

The rate of capacity utilization, or the ratio of an industry’s actual output compared with its estimated potential, rose to 83.6 percent in the fourth quarter, compared with a revised 83.2 percent in the prior period, the agency said.

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