Canadian household debt has also continued to rise coincident with housing prices.
Krugman thinks perhaps"Canada offers a useful test case for theories about what lies behind the Great Recession and the Not-So-Great Recovery" and has some concerns:
So if the new, non-bank-centered view is right, Canada ought to be quite vulnerable to a big deleveraging shock despite its boring banks. Of course, people have been saying this for several years, and it hasn’t happened yet — but remember, the US housing bubble took a long time to pop, too.While there are some obvious differences, particularly the proximity and border with the USA, Canada is often used as a comparison with Australia as a developed country with a large resource sector. This is a similar graph of household debt from the RBA chart pack.
So Australian household debt has been almost flat since the GFC relative to household disposable income, sort of half-way between the USA and Canada trends, albeit at levels currently comparable to the USA, UK and Canada. A look at the trend for Canadian deficits & surpluses in recent decades has similarities with Australia also.