Canadian households got a little poorer in the fourth quarter of 2018, thanks to falling stock prices and the first annual drop in the value of real estate in records going back to 1990, Statistics Canada said Thursday.
Household net worth dropped 2.8 per cent, thanks in no small part to the stock market slide at the end of 2018, a lot of which has reversed in the past few months.
But Statistics Canada noted that residential real estate value is falling as well, down 1.4 per cent in 2018 to mark the first annual decline in data going back to 1990.
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Other things that dragged down Canadians' wealth was a 23.5-per-cent drop in the value of natural resources, led by slumping oil prices.
After moderating somewhat last year, household debt is on the rise again, with Canadians owing a record $1.79 in credit market debt for every dollar of disposable income. The share of income Canadians spend on monthly debt payments is now close to an all-time high.
The pace of borrowing accelerated slightly, but experts say the trend continues to be towards a slowing of borrowing.
"The bigger picture is that household credit growth is still headed in the right direction, slowing to a much more sustainable rate than in previous years," Bank of Montreal economic analyst Priscilla Thiagamoorthy wrote in a client note.
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"You may not be as rich as you think," TD Bank economist Ksenia Bushmeneva wrote. "After two back-to-back declines in the second half of last year, the wealth of Canadian households was actually lower at the end of 2018 than it was a year ago."
Bushmeneva noted this was the first annual decline in Canadians' net worth since the financial crisis a decade ago. All the same, she expects some "reprieve" for households in the coming months.
"Stock markets have been on a firmer footing and the Bank of Canada is expected to keep rates constant," she noted.
"Still, lower household wealth and (a) cooling property market will likely hurt both consumer confidence and spending ... further adding to the number of headwinds hindering Canadian economic growth this year."