‘Canada Is In Serious Trouble’

Deutsche Bank’s chief international economist Torsten Sløk has circulated a chart deck looking at global housing markets, and Canada stands out as having quite a few problems.
Sløk dedicated seven charts to the country.
Simply put, debt levels are very high, and with sky-high home prices cooling off, we could see pressure on the Canadian financial system and the labor markets.

While US households have been deleveraging since the Great Recession, Canadian household debt as a percent of household income is higher than ever:

Torsten Slok/Deutsche Bank

The mortgage credit market has been slowing down, which is a bad sign for the housing market:

Torsten Slok/Deutsche Bank

Other forms of debt have also been exploding, while income has grown at a much slower rate:

Torsten Slok/Deutsche Bank

Construction of houses has been level over the last decade, while multifamily units like apartments have reached record highs:

Torsten Slok/Deutsche Bank

Canada’s biggest housing market, Toronto, has been slowing down over the last couple years:

Torsten Slok/Deutsche Bank

Meanwhile, Canada’s West Coast metropolis of Vancouver has held steady:

Torsten Slok/Deutsche Bank

Any difficulty in the Canadian housing market could bleed over into the larger economy, since construction is a much larger part of Canadian employment than US employment: