Canadians Display Signs of Financial Prudence During a Period of Declining Wealth
After almost a decade of wealth accumulation, the average Canadian household net worth declined slightly in 2018. While the latest financial snapshot of Canadian households includes some positive trends, growing debts, shrinking pensions and a sharp drop in liquid assets are putting pressure on families.
Although national real estate values continued their steady march higher, a new analysis by Environics Analytics found that the average household net worth in Canada fell across the country. A significant pullback in the equity market in the final few months of the year was a significant factor in the decline, coupled with rising household debt levels and higher interest rates, which reduced employer pension plan values.
“Despite being relatively prudent in terms of their debt acquisition and repayment in 2018, Canadian households felt the effects of a significant decline in equity market valuations over the fourth quarter of the year,” says Peter Miron, Environics Analytics’ Senior Vice President, Research and Development and the architect of WealthScapes. “On a more positive note, Canadians are actively taking steps to reign in their debts and build up their savings. In fact, four provinces saw the average debt per household decline in 2018.”
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