It’s that time of year again, when we vow to kick bad habits and set a healthier or more positive course for the new year ahead. Improving our finances usually tops the list, and this year is no exception.

For the 10th straight year, the top financial priority for Canadians in 2020 is to pay off their debts—perhaps not surprising given that the average person dropped about $1,600 on holiday shopping last month.

With this goal in mind, nearly three quarters of Canadians (71%) said they held back from borrowing more money in 2019, according to a recent CIBC poll. On the flip side, about 31% of Canadians saw their debt load increase last year, according to the BDO Canada Affordability Index.

Despite paying down debt being a top priority, it’s also consumers’ biggest challenge. The BDO survey found that while more than 43% of Canadians are slowly paying down household debt, another 30% admit to delaying paying down their credit card balances because they can’t afford it.

The data also shows credit card use is growing, with 57% of Canadians carrying a card balance in 2019, up from 53% in 2018. Not to mention the recent rise in delinquency rates.

Long story short, high debt loads continue to be a thorn in the side of the country’s financial system, and one being watched closely by experts.

Bank of Canada Governor Stephen Poloz has been sounding alarm bells for months, and most recently stated recently that household debt “continues to be Canada’s biggest financial system vulnerability,” though did qualify that by adding the Bank is confident it’s “becoming less of a threat over time.”

Canadians Still Value Home Ownership

So what does this mean for Canada’s real estate sector?

Despite high debt loads and reduced affordability, owning a home continues to be a priority for most Canadians.

And while those with children often face added affordability challenges, the BDO Affordability Index found the percentage who are homeowners rose over the past year to 70%, up 7% from 2018.

In many cases, this has been made possible due to sacrifices made over the past two years to achieve that homeownership goal. That includes delaying buying essentials, like food or healthcare products (15%), postponing their planned retirement date (17%), putting off a car purchase (28%) and delaying taking a vacation (51%). Another 13% said they have delayed paying essential utilities, like hydro, phone or gas.

“Putting off a vacation or the purchase of a new vehicle may be necessary sacrifices for avoiding debt,” reads the BDO survey. “But delaying basic needs is a clear sign of financial distress.”

It also found distress among non-homeowners, 70% of whom say they are unlikely to purchase a home in the near future due to their debts, rising costs of living and overpriced housing markets.

“While affordability challenges aren’t solely linked to too much debt, the findings of the BDO Canada Affordability Index show that debt is a major factor,” the report adds.