This HuffPost Canada page is maintained as part of an online archive.

Canadians Richer Than Americans? Yes, But Probably Not For Long

Canadians Richer Than Americans .. But Don't Get Used To It
wonder_al via Flickr

For the first time in recent history, Canadians are richer than Americans, but a new report suggests this situation may not last long.

Canada’s net worth has reached 648 per cent of GDP, research consultancy Capital Economics said in a new report, while U.S. net worth stands at 550 per cent of GDP.

The report backs up other recent data indicating Canadians have pulled away from their southern neighbours when it comes to wealth.

Data from the IMF shows Canada’s per capita GDP pulled ahead of that of the U.S. in 2012, while an Environics Study from last year pegged Canadian net worth as being $40,000 greater than U.S. net worth ($363,000, compared to $320,000).

But Capital Economics says Canadians’ new-found wealth is the result of record-high Canadian house prices in recent years, during the same period that the U.S. saw the collapse of its housing market. Houses make up the largest part of most households’ net worth (which is defined as assets minus debt).

According to the Canadian Real Estate Association, the average house price in Canada is $378,532. In The U.S, the average house sells for $173,000, according to the National Association of Realtors.

“The problem is that the advantage Canada enjoys is largely due to the run-up in residential property values. As a result, there is a good chance that the wealth gap between the two countries will narrow sharply over the next few years,” the report stated.

Capital Economics estimates that the U.S.’s housing market is about 20 per cent undervalued, while Canada’s is 30 per cent overvalued. If these markets adjust back to their long-term trends, Canadians’ wealth advantage would disappear.

“[W]hile Canada has the bragging rights for now, things could be very different in a few more years,” the report said.

Also on HuffPost

10. Canada

10 Countries With The Most Billionaires

Close
This HuffPost Canada page is maintained as part of an online archive. If you have questions or concerns, please check our FAQ or contact support@huffpost.com.