Property Boom Drives Pandemic Surge in Canada Household Wealth
(Bloomberg) -- In the midst of a deep economic crisis, Canadians are becoming a whole lot richer.
The nation’s households have seen their net worth jump by more than C$600 billion ($469 billion) since the end of last year, according to third-quarter data released Friday by Statistics Canada. That’s despite a downturn that saw 3 million people lose jobs and the unemployment rate surge to historic highs.
The numbers show the extent to which efforts by the Bank of Canada and the federal government to flood the economy with cash have shored up household balance sheets, providing a cushion to the economy. The interest rate cuts by the central bank have stoked the housing market, while government support more than offsets falling incomes.
On a per capita basis, household net worth reached a record C$320,441 in the third quarter, up about C$12,000 since the end of last year.
The value of land and residential structures held by households, which grew by about C$440 billion this year, was the main contributor to the wealth boost.
While mortgage debt is also increasing to finance some of those home purchases, the increase in leverage is nowhere near the gain in asset values. The ratio of debt to assets fell to near the lowest in 15 years.
Sharply higher household net worth was offset by a deterioration in government finances, with state borrowing surging to records this year.
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