Rise in asset values pushes up Canadians’ wealth

Originally posted at The Globe and Mail - link

Monday, August 11 2014—Canadians saw their net worth climb by nearly 8 per cent last year as real estate and investment values soared, pushing average household wealth levels to a new high and offering a clear indication that many Canadians have put the recent recession far behind them.

An analysis of wealth by Environics Analytics shows the average household in Canada had total assets of $564,834 at the end of 2013 and average debt of $122,705, for average net worth of $442,130. Average wealth was up 7.7 per cent from the end of 2012 and 28 per cent from the end of 2007 before the recession began.

“Overall, 2013 was a very good year for Canadian balance sheets,” said Peter Miron, senior research associate at Environics Analytics.

Increasing real estate values are continuing to play a key role in wealth gains, but the analysis shows that gains on investments are becoming a more important component in wealth. Investments climbed by 10.4 per cent last year to $145,348 per household on average, while assets in other savings vehicles such as bank accounts or term deposits climbed by 2.2 per cent to $83,652 per household.

The investment gains came as Canadian and U.S. markets posted strong returns, increasing the value of shares and mutual funds, which are widely held by many Canadians. Mr. Miron said some of the increase in investment wealth was also due to higher savings rates with more new money going into investments as household finances improved and there was greater optimism about potential investment returns.

The WealthScapes analysis is based on 121 financial and investments statistics from a variety of sources, including Statistics Canada and the Bank of Canada. (continue reading at TheGlobeAndMail.com)