A red hot housing market has turned Vancouver into Canada’s first ‘city of millionaires’, with average household net worth hitting seven figures.
In 2015, the average net worth of Vancouver households rose to $1,036,202, up 7.1 per cent on the previous year, according to the Environics Analytics WealthScapes 2016 report. The Canada-wide average, meanwhile, was $680,098.
Overall figures showed Canadians are getting richer, with net worth rising 4.3 per cent on the previous year, while debt grew 4.1 per cent to average out at $133,170.
The figures were highly uneven depending on the area of Canada. The drop in oil prices meant the more reliant provinces suffered. Alberta saw a 0.7 per cent decline in net worth, while Saskatchewan and Newfoundland & Labrador saw weak growth of 1.1 per cent and 1.8 per cent respectively.
At the other end of the scale, Ontario, Quebec and British Columbia thrived because the weak Canadian dollar buoyed exports. Net worth grew by 5.2 per cent, 5 per cent and 6.3 per cent respectively in those three provinces.
But it was real estate that truly boosted net worth growth, concentrated in Greater Vancouver and Ontario. Across Canada, the average value of real estate grew by 4.6 per cent to $421,506.
The snowballing Vancouver housing market caused the B.C. government to introduce a foreign buyer tax of 15 per cent. Early signs are the measure is working, although it could have the impact of further heating the Toronto market.
Despite some difficult times for the Canadian economy, including a slump in oil prices, households have managed to navigate the challenges and steadily improve their balance sheets. Savings and investments grew by 4.3 per cent and 2.2 per cent in 2015, while consumer and credit card debt increased at a manageable 1.6 per cent and 1.4 per cent, respectively.
“Despite some economic hardship in the oil provinces, Canada overall is humming along,” said Peter Miron, the lead developer of the report.
“We aren’t seeing any wild growth in household income, but nor are we seeing dramatic declines in income or wealth. Among most segments of the Canadian population, we’re seeing pretty consistent growth in net worth.”
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