A new study by Statistics Canada reveals that Canadian families have become wealthier during the past several years, based on their rising net worth. The study published all its figures in inflation-adjusted dollars.
According to the study, which takes a long-term view on the state of Canadian finances, the 2012 medium net worth among family units comprising two or more members rose by 44.5 percent since 2005 to $243,800. This increase almost touched the 80 percent mark, on comparing current net worth with data from 1999.
Interestingly, this increasing net worth comes despite two major negative factors i.e. the setbacks arising from the recent recession as well as the well-documented growth in household debt.
The agency found that family units comprising two or more family members also accumulated a total debt of $1.3 trillion in 2012, of which $1 trillion is mortgage debt. Thus, while the net worth showed an increase of 44.5 percent since 2005, the mortgage debt also rose by 41.6 percent since 2005.
The study showed that total family assets in Canada rose to $9.4 trillion in 2012, with the families’ principal home accounting for a third of the total assets. People owning their own homes showed the median reported value of their residence at $300,000 – an increase of 46.6 percent since 2005 and of 83.2 percent since 1999.
Pension assets e.g. employer plans and private pension plans, made up 30 percent of the total. Other real estate holdings e.g. rental properties, cottages, timeshares and commercial properties, accounted for nearly 10 percent of the total assets.
The study also revealed large disparities in net worth, depending on factors like the age, nature of the family unit and regions of the country. Thus, the median net worth was highest for families where the highest earner was 55 to 64 years old or for families residing in British Columbia.
According to Bank of Montreal chief economist Doug Porter, over the 13-year period, the net worth rose by over five percent annually, which also ensured that the assets exceeded the size of debt by about seven times. He felt that this was the most significant aspect of the study.
Source: National Post