Net Worth of Canadian Households over $400,000: Report
The average household net worth in Canada has exceeded $400,000 for the first time, calculations by marketing consulting firm Environics Analytics show.
In its annual WealthScapes report, Environics stated that the average household net worth of Canadians was $400,151 as of Dec. 31, 2012, marking a 5.8 percent increase over the average in the previous year.
The report noted that the record high net worth was a sign of Canada’s recovery from the 2008 economic downturn.
“The financial crisis is now well in Canada’s rear-view mirror,” Peter Miron, a senior research associate at Environics and the lead developer of the report, said in a statement. “Everything appears to be on the upswing.”
In coming up with its calculations, Environics used data from a variety of sources including Bank of Canada and Statistics Canada, among others, and its own estimation models.
According to the report, a number of factors contributed to the rise in Canadians’ net worth, including a 5.4 percent increase in liquid assets and 5.1 percent rise in real estate compared to the previous year, and the fact that the rise in debt was at relatively modest levels of 3.3 percent.
The rise in liquid assets are in major part thanks to a robust stock market, the report stated, with Canadians seeing the value of their stocks go up an average of 5.6 percent, and their investment funds by 8.9 percent. The recovering economies in the U.S. and Europe are among the factors helping financial markets.
Canadians also saw a rise in mortgage debt due to rising property values, and to a lesser extent, a rise in consumer (non-mortgage) debt.
The average Canadian household was shown to still be richer than the average American household (C$400,151 in Canada, compared to US$381,086 in the U.S.), although the difference between the two is dwindling compared to last year.
The report warns that Canadians should watch their debt levels, as a 3.3 percent increase in debt puts the average household debt in Canada at C$120,115. The average household debt level in the U.S., which had a 2.4 percent decline compared to the previous year, is now at US$100,272.
The Big Three
Vancouver, Calgary, and Toronto were named the wealthiest cities in Canada, with household net worth in excess of $600,000.
Thanks to its high real estate prices, Vancouver’s average household net worth was found to be a whopping $662,600.
Regina saw the largest increase in its net worth, with an 11.2 percent increase to reach $391,826 in 2012, thanks to its growing real estate market.
Quebec City’s average net worth of $250,058 put it at the bottom of Canada’s 10 largest cities.