Plummeting real estate values and stock markets combined with high inflation and rising interest rates have erased household wealth acquired over the last year, StatsCan reports.
Canada’s wealthiest households saw nearly $200,000 wiped off their net worth in the second quarter of 2022.
The average household net worth in the second quarter of 2022 was $940,560, down $65,400 from the first quarter and down $19,300 from the second quarter of 2021, the report says. The decline in net worth for the wealthiest families was mainly due to a combination of the declining value of financial assets, which dropped by six per cent, and a plunge in real estate values, which dropped by 5.4 per cent.
The report found that younger households saw their net worth decrease at the fastest pace compared to older households. Those 35 years and younger, and 35-45 years old had on average 8.2 per cent less in average wealth from the first quarter, whereas those 65 years and older saw a 6.1 per cent decline.
The wealth gap also widened for the first time since the pandemic began by half a percentage point from the first to the second quarter. In contrast, the wealth gap declined by two percentage points from the first quarter of 2020 to the first quarter of 2022.
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