Canadians’ net worth declined in 2018: Environics
Following almost a decade of wealth accumulation, the average Canadian household’s net worth declined slightly in 2018, dropping 1.1 per cent or $7,594 to $678,792 by the end of the year.
Although national real estate values continued to rise, climbing 1.6 per cent or $6,336 on the year, these gains were offset by the significant pullback equity markets experienced late in 2018.
The WealthScapes report by Environics Analytics found that overall investment portfolios dipped 7.3 per cent on the year to $181,231. Traditional bank deposits grew 4.4 per cent to $100,212 while higher interest rates also encouraged savers to buy GICs and term deposits. These jumped 10.3 per cent during the year to $41,645. The average value of real estate held by Canadians rose 1.6 per cent to $393,789 in 2018.
Household debt on the rise
Household debt levels, meanwhile, also climbed 2.3 per cent, while higher interest rates reduced employer pension plan values by $576 or 0.4 per cent.
Provincially, British Columbia remains the wealthiest province in the country, with a savings rate more than five times greater than the national average. Four provinces: Newfoundland, Nova Scotia, Saskatchewan and Alberta, all saw the average debt per household decline in 2018. Alberta and Saskatchewan suffered the largest average net worth declines per household during the year, declining 4.1 per cent and 2.9 per cent respectively in 2018.
“Collectively, Canadian household assets declined by 0.5 per cent in 2018 to $825,484,” they write. “This downward pressure on household net worth was further compounded by increasing household debt levels, which rose by 2.3 per cent to $146,693. Debt growth was evenly split between consumer debt, up 2.2 per cent to $41,962 and mortgage debt, up 2.4 per cent to $104,731.