Nov 01, 2012
By Jane Brown
Bank of Canada Governor Mark Carney is offering his advice after learning that many Canadians are tying their retirement financial security to the value of their homes. Carney says he’s seen his own evidence that Canadians feel financially secure because their assets are bigger than their debts.
But he says they get a rude shock when house prices plummet, and they’re unable to sell their homes but still face monthly mortgage payments.
Carney says that has happened many times, most recently in the United States in 2008.
The Bank of Canada governor says he’s concerned at figures that show the average Canadian household owes $1.63 for every dollar earned.
He suggests that’s uncomfortably high, and adds he’s also concerned that household worth is also “very high.”
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