Canadian homeowners' net worth exploding as renters get left behind
The Canadian real estate market has exploded over the past year, quickly pushing homeowners’ net worth to historic highs while renters have been left behind.
A new report from Statistics Canada details the net worth changes experienced by Canadians in the first quarter of 2021. Results found that Canadian households have experienced a 6% growth in net worth, equating to an approximate $770 billion nation-wide increase.
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The real estate market is largely to thank, with that market alone experiencing an unprecedented $595.5 billion growth in the first quarter of this year. For context, in all of 2020, the market grew by just over $750 billion.
With real estate markets all across Canada maintaining the red hot heat that started last year, homeowners accounted for an overwhelming majority of the household net worth increase. In the first quarter of this year, households that owned their own home accounted for over $730 billion of the $770 billion gains. Renters across the country, on the other hand, saw a total net worth rise of approximately $43 billion.
To break this down by household, Canadian homeowners increased their net worth on average by $73,000 each in the first three months of the year. Renter households’ net worth rose just $8,000.
Perhaps not too surprisingly, these gains are distributed unevenly across age groups. Households with a major income earner under 35 had the least amount of wealth out of all age groups, with an average total net worth of $260,000. However, households with a major income owner over 55 had net worths of roughly $1.1 million.
With housing prices expected to continue rising throughout the rest of the year, homeowners will likely continue to experience disproportional gains.