BUSINESS

'Millionaire Cities' Abound In Canada As Household Wealth Hits Record High

Rising house and stock prices are behind Canadians' rapidly-growing riches.

09/05/2017 12:50 EDT | Updated 09/06/2017 10:06 EDT
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Sailboats in a marina in Toronto harbour. Toronto is one of four cities in Canada where the average household net worth is now above $1 million.

Canadians' wealth grew to the highest levels on record in 2016, pushed forward by rising house prices and a solid performance by the stock market.

According to the latest edition of the Wealthscapes survey from Environics Analytics, four cities are now in the "millionaire club" — places where the average household net worth is above $1 million.

Vancouver, Toronto, Victoria and Calgary, in that order, all have an average net worth above $1 million. Prior to the 2016 data, only Vancouver had been in that club.

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Net worth is defined as assets (a house, a stock portfolio, etc.) minus liabilities (debt).

For Canada as a whole, average household net worth grew 12 per cent in 2016, to $770,635, the Wealthscapes report found.

In large cities with rapid real estate price growth, such as Toronto and Vancouver, about three-quarters of the gain in wealth came from rising house prices, said Peter Miron, vice president of demographic and economic data at Environics.

He noted that these two cities also saw the largest gains in net worth. Vancouver topped the list with a 19.4-per-cent jump in net worth, while in Toronto it rose 17 per cent in a year.

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Canadians' wealth is growing faster than their debt. While net worth jumped 12 per cent in a year, debt grew a "relatively restrained" 4.4 per cent to an average of $139,387, the Wealthscapes report found.

Debt is still growing faster than income, which rose by just one per cent in 2016, the report noted.

The fact that Canadians are taking on debt faster than their incomes are rising "has been a niggling worry for eight years now, if not longer," Miron said.

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But he noted that, given the large millennial population that is moving into first home buying age, growing debt loads are to be expected.

"The fact that we're only seeing a 4.4 per cent increase in debt is a good sign," he said in an interview with HuffPost Canada.​​​​​​

More about Canadians' wealth and debt: