The latest survey by the Angus Reid Institute suggests that nearly 90% of Canadians are “tightening their belts” as a result of rising costs, an 8-point increase from August.
Most (66%) are cutting back on discretionary spending but fully half are delaying major purchases like appliances, cars and homes. More than a quarter (26%) now say they are taking the troubling step of deferring contributions to savings – which could include savings for a home – or to their retirement. That is up from 19%, who said the same thing, just six weeks ago.
The survey also suggests nearly half of Canadians feel their financial situation is worse now than it was a year ago.
Using the ratio of mortgage carrying costs to household income the bank’s, so-called, “aggregate affordability measure” hit 60%. That beats the previous worst-ever reading of 57%, hit in 1990.
The bank expects the current housing market correction to push prices down 14% by the end of the year which, it says, will help affordability. But it also expects on-going interest rate increases to delay the benefits of any price declines.