There are signs that Canadian consumers have slowed down their borrowing this year, after peaking in the fourth quarter of 2010.
A TransUnion analysis released Thursday found that average consumer debt, excluding mortgages, was $25,594 in the third quarter.
That’s about where it has been throughout 2011, although up slightly from where it was in the third quarter of 2010.
That means Canadians are reluctant to add to their lines of credit, consumer and car loans and credit card debt as they face an uncertain economy that’s eroding their confidence.
On the mortgage side, the Canadian Mortgage and Housing Corp. said earlier this week that the growth of mortgage loans has slowed down to an average of just under $160,000.
That reflects tougher lending rules imposed by Ottawa and a slowing economy, which has put downward pressure on house prices.
The agency also noted that mortgage insurance bought by homeowners facing high-ratio debts fell by about 10%,
TransUnion is a firm that tracks consumer borrowing through credit cards, lines of credit and auto financing.
In its report Thursday, the financial analysis company said the third-quarter debt total is still about 1.7% higher than in the same 2010 period but notes the pace of increases has slowed as the year has progressed.
“The latest quarterly data suggests that Canadian debt loads truly are stabilizing,” said Thomas Higgins, TransUnion’s vice president of analytics and decision services.
“Global economic uncertainty surely played a part in Canadians’ move to further draw down their debt load. In the third quarter alone, Canadian consumers witnessed major stock market declines, the European debt crisis and continued high unemployment.”
The fourth quarter of 2010 appears to have been a turning point, marking the end of 26 consecutive quarterly increases stretching back to the middle of 2004.
Government statistics suggest Canadian consumer debt has reached record levels that many economists have warned are unsustainable if interest rates go up.
In its report, TransUnion said changes in total debt are occurring throughout Canada. Six provinces saw drops or stable total debt numbers in the third quarter. Year over year, only two — British Columbia and New Brunswick — have had total balances decline.
“The next two quarters will be important as we observe if year-over-year total debt begins dropping in the majority of provinces,” added Higgins.