Data from Statistics Canada shows that the 35- to 44-year-old age group is the most indebted in the country, while those over 65 have never been richer.
According to RJ O'Brien and Associates market strategist Simon Brière, who was on the set of the show “LCN Now” on Monday, this phenomenon would be due to the post-pandemic impact of the surge in inflation, in particular the rise in interest rates, which hits harder those who are for pay for a property.
“A lot of that debt, I would say fortunately, is backed by an asset, particularly real estate,” he explains. Access to property is difficult, houses are extremely expensive, and we can see that people of my generation who bought by force are not in a situation of over-indebtedness due to restaurants, expenses and a “lifestyle without a future”. A large portion of this debt is real estate.”
The rich, in turn, were able to use their excess liquidity to avoid inflation and continue to save.
“There is no such severe recession for the rich,” he said. Someone who had the money to buy a Ferrari in 2018 probably still has the money to buy a Ferrari today, while the middle class, with mortgage payments, food and resources, having savings and investing becomes increasingly difficult.”
“Anyone who has money was able to benefit from their additional liquidity, because by definition, at the age of 65 and for a lifetime, the house is paid for much more than for a young family,” the expert continued.
However, the market strategist sees a possible glimmer of hope on the horizon for those aged 35 to 44.
“At some point, which may be in a few years, we should find some form of compensation through wage increases and perhaps cuts in the base rate that would give households a little more oxygen because mortgage payments are extremely high and we know that. “This will be the case in the next two years [au moins]”, he says.
Watch the full interview in the video above