The report shows that the average wealth of the younger age group, in which the main income is under 35, decreased by 1.4 percent in the fourth quarter of 2021. Meanwhile, those aged 35 and over who have the highest household income increased their wealth by an average of 0.8 percent, with the country’s richest households or those in the two lowest wealth quintiles also increasing faster their average net worth. rhythm of the richest. Mortgage debt, non-mortgage debt and financial assets contributed 3, 4.7 and 0.8 percent respectively to the net worth of the less affluent households, while real estate and consumer goods fell by 4 and 0.7 percent, respectively. percent. Property values showed little change in the fourth quarter of 2021 for the younger age group, which according to StatCan is due to the fact that younger Canadians are reluctant to buy a home. The same age group also reduced its average debt by 2.8%, more than any other group. However, the value of their non-retired financial assets, including cash held in savings accounts, mutual funds and other investments, decreased by 3.3%.
HIGH COST IMPRESSES WATER CANADA FROM THE MARKET
The report comes as more young Canadians say they are postponing home buying amid record house prices. A poll released last week by Scotiabank found that 43 percent of Canadians are putting their housing plans on hold, up from 33 percent in 2021 and 20 percent in 2020. An even larger share of young Canadians appear to be concerned about the housing market as a whole. According to the survey, 56 percent of Canadians between the ages of 18 and 34 said their current economic environment had halted plans to buy a home, while 62 percent said they expected prices to fall. Mortgage experts also say they are seeing more relatives make advances to family members to help cover the initial costs of buying a home. In November, IG Private Wealth Management reported that the country’s wealthiest families would give an average of $ 145,000 to each of their children to help them buy their first home.
FEDERAL BUDGET AND HOUSING
In an effort to meet the challenges of affordable housing, the Liberal government, backed by the NDP, will try to approve its recently published budget, which promises about $ 10 billion over five years for various housing initiatives. The federal government will try to double the number of homes built each year over the next decade to about 400,000 to meet the 3.5 million it estimates it needs by 2031 to meet demand. Home prices have risen more than 20 percent since last year, to $ 816,720 in February. The federal government will also ban foreign buyers from buying homes in Canada for the next two years, with some exceptions. However, real estate experts have expressed mixed feelings about how effective these measures will be. Foreign buyers currently make up less than 2 percent of the BC market, for example, said Provincial Housing Minister David Abby. The Liberals will also introduce a new First Duty Free Savings Bank, which Canadians under the age of 40 can use to raise up to $ 40,000 as early as 2023 to purchase their first home. The federal government also plans to double the tax credit for first-time home buyers to $ 10,000 and expand the incentive for first-time home buyers to reduce their monthly mortgage payments. “We will make it easy for our young people to get these first keys of their own,” said Federal Finance Minister Chrystia Freeland.
WEALTH RANGE IS REDUCED
Another notable trend in the recent StatCan analysis is the narrowing of the wealth gap between the richest and least affluent households in Canada. During the pandemic, the difference in the share of net worth between the two teams narrowed at the fastest rate ever recorded, the federal agency said, falling by 1.7 percentage points compared to the end of 2019, which corresponds to the total all reductions to 10 years before that. StatCan said Canada’s wealthier households increased their net worth by paying out mortgages and other debt, rather than acquiring real estate or non-financial assets such as cars and appliances. All households, however, increased their debt-to-income ratios, a measure used to determine a household’s ability to service debt, which was close to pre-pandemic rates. StatCan saw significant increases in the 45- to 54- or middle-aged group (9.3 percentage points) and in the elderly or people 65 and older (8.4 percentage points). The asset debt ratio, which may indicate the degree of financial vulnerability of a household, remained stable until 2021 in all groups. With files from CTV News and the Canadian Press
