Toronto households' average debt to income ratio is 208%. That is the second highest in the country, and one of the highest personal debt ratios in the world.
Over 80% of that debt is tied to mortgages.
Think that's bad? Now consider this...
74% of Toronto households don't have a mortgage. Of the 26% that do, 79% have owned their homes for over 5 years and have likely paid down debt and built equity in their homes. The remaining 21% are leveraged to the tits and have negative equity.
Torontonians with mortgages have an average debt to income ratio much higher than 208%. Those who bought within the past 5 years likely have debt to income ratios closer to 400%!
So what...a relatively small portion of Toronto home owners are fucked, but most aren't, right? Wrong. The implosion of excessive leverage at the margins of an economy spill over into the broader economy hurting everyone. Simply put, if 21% of mortgage holders are forced to dump their homes, the value of the entire housing market will be impacted. Broad weakness in the housing market will kill the many jobs connected to the industry (e.g. construction, durable goods). I could go on, but instead I'll jump to the punch line: Torontonians are fucked.