In Canada, Money, Wealth

What is the average net worth of Canadians without their house?

I went over the average net worth of a Canadian by each province and major city, but here is the provincial net worth broken down WITHOUT their houses!

Houses are a huge part of anyone’s net worth. Just with mine alone, as of this writing, my home accounts for 40% of my net worth.

My original goal when I bought my house was to only have it be 50% of my net worth or less. I knew I didn’t want to be house rich and cash poor, so even though I paid for my home in cash (yes, I am mortgage free) I felt comfortable that I wasn’t putting my money ALL into a fixed asset I couldn’t eat, so to speak.

Notes:

  • The house stats are their principal residence although it could be real estate that is not your principal home
  • I say “cash” but I mean cash and cash equivalents — liquid savings in pensions, stocks, bonds, etc…
  • I tried my best to work out the numbers but .. again.. AVERAGES!!!
  • Source: StatsCan

AVERAGE NET WORTH OF A CANADIAN SPLIT BY CASH AND HOUSE

I find it looks pretty normal.

When you’re young, you throw most of your money into your home (hello 3/4ths of your net worth in a house!), and as you age, you slowly pay down the house, keep saving, and make far more money especially in your 55 to 65 year age range.

When you retire, then you have less money as you are drawing down on retirement funds, and your house starts becoming a bigger part of your net worth as your cash reserves dwindle down.


Now if we look at the provinces one by one..

DISCLAIMER: THESE ARE AVERAGES

…meaning, they do not look at an individual or their household with their entire story, history and background.

This means that the average net worth is let’s say $179,900 for someone under the age of 35 in Alberta, but that doesn’t mean that everyone has that net worth and own a house with a mortgage.

Trying to marry up the averages of home ownership with mortgages and net worth, is going to give very strange numbers, but they are quite telling nonetheless.

If you are interested in each individual household and their assets, etc, you should follow people who post their net worth updates like Gen Y Money who lives in Vancouver, or myself with my budget roundups and I live in Montreal.

ALBERTA

BRITISH COLUMBIA

MANITOBA

NEW BRUNSWICK

NOVA SCOTIA

ONTARIO

PRINCE EDWARD ISLAND (P.E.I.)

QUEBEC

SASKATCHEWAN

Some observations:

THREE PROVINCES THAT SEEM AVERSE TO DEBT

New Brunswick, Newfoundland, and P.E.I. are the three provinces where it was unusual to see anyone under 35 years of age owning a home and/or a mortgage.

There just wasn’t any real info or averages of a principal residence net worth, or a mortgage.

WHICH ONES CLEARED THEIR MORTGAGES ON AVERAGE

Newfoundland, Nova Scotia, and P.E.I. cleared their mortgage by 55-64 years old.

New Brunswick and Saskatchewan cleared their mortgage by the 65 years old and older age range.

ON & B.C. TOOK ON THE HEAVIEST MORTGAGE DEBT VERY EARLY

The provinces that seem to go gung-ho on mortgages before the age of 35 are predictably, Ontario and British Columbia. They are seriously over-leveraged at a very young age.

Since I was using averages, the numbers do not add up to 100%, so keep in mind that some people do not have any mortgages whereas others took on mortgages beyond their means.

You can see that on average, Ontario and B.C. were provinces that in the under 35 year old range, had NEGATIVE net worths, or were heavily in debt due to their mortgage at 102% over-leveraged for a home and 122% respectively.

For me, this makes sense because those two provinces have the highest real estate prices.

Overinflated, many might say, but if you are a young person trying to get a house in those areas, you are going to end up seriously in debt early on, and for a long time.

Looking at Toronto, even adjacent cities like Guelph are starting to pick up in housing prices because Toronto and the GTA is just getting bigger and bigger, and cannot hold everyone within city limits.

WHEREAS OTHER PROVINCES GOT IN EARLY BUT NOT IN OVER THEIR HEADS

Québec, Alberta, Saskatchewan, and Manitoba, did not avoid mortgages like the Atlantic provinces, but they did not go over 100% of their net worth into the negatives just to own a home.

Surprisingly, Québec had a pretty high part of their net worth towards a house under the age of 35, at 75%.

That surprised me, whereas the others were nearer to the 50% range.

It makes me wonder if housing prices in the major cities like Montréal and Québec City are rising, and in the next 10 to 20 years, we are going to see the same sort of negative net worth trends as in Ontario or B.C.

Now if we look at the cities individually, the big ones, there are more interesting trends to pick out:

CALGARY, AB

EDMONTON, AB

MONTREAL, QC

VANCOUVER, BC

WINNIPEG, MB

PAID OFF MORTGAGES IN THE BIG CITY…

So far, all of these average mortgages in the big city with the exception of Toronto were paid off by the age of 65, as an average or did not have enough data to say whether or not it was cleared — but it looked pretty good as a bet that they had no debt afterwards or very little by the time they turned 65.

TORONTO DOESN’T REALLY EVER CLEAR THEIR MORTGAGE LIKE THE OTHERS

Toronto however, looks like that don’t ever really make a dent in the mortgage.

They carry only about $20,000 to $40,000 less from one age group to the next.

Note their House percentage past the age of 65, it is still in the 40% range but without a mortgage cleared on average.

MONTREAL REALLY TOOK ON DEBT TO AFFORD A HOME

This is where I saw a city trend really highlight the situation versus a provincial one.

Remember how above, Québec surprised me at having 75% of their net worth under the age of 35 in a house?

Well, Montréal seems to be the main culprit driving those percentages, because they are at 104% over their net worth to own a home, meaning 4% on average into the negative net worth.

That said, their home prices were around the $300,000 range (half that of Toronto or Vancouver), but they were still over-leveraged in debts of debt to afford it.

Not quite as much as Vancouver or Toronto being 40% over, but still..


I suspect part of the reason is that Montréal may have lower home prices versus Toronto or Vancouver, but they do not have as high of a salary on average.

You can make more money in Toronto or Vancouver than in Montréal, and the cost of living will be higher in those two cities, but not high enough to offset the salary bumps.

That, or there are just more immigrants coming in with lots of money that are able to buy these homes for themselves or for their children as a way to park their money, that jack up the stats.

VANCOUVER LOVES A GOOD UPGRADE

Vancouver, interestingly enough, tends to upgrade their home past the $1,000,000 mark around the age of 45 to 54.

You can see the slight increase in the house as part of their net worth, but looking at the hard averages that I used to give you that percentage, it went from a house on average costing $897,600 when they are 35 to 44, to a $1.278 million dollar home when they head into their 45 to 54 years old age range.

Either they were caught in the middle of an upswing in housing prices between these two age ranges, or they upgraded from a starter home to a bigger, and therefore more expensive one.

The mortgage average itself however, never seems to waver from about the $300,000 range …

WHERE IS QUEBEC CITY?

I had zero stats on them. Literally zero, blank columns and I guess either no survey was done with them, or they declined to answer / did not have enough people to create the stats.

—–

Can’t get enough? I have all of my Canadian Net Worth Series posts here.

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Sherry of Save. Spend. Splurge.

Millionaire at 36 after getting out of $60K of student debt in 18 months, a little over a decade earlier, using TheBudgetingTool.com. Since then, I have paid my $600K home in cash (my half was $300K), my $180K casr in cash, worked 50% of my career (taking 1-2 year breaks), and quadrupled my income within 2 years of graduating, going from $65K to $260K with an average lifetime savings rate of 50%. I could retire today if I wanted, but love my work-life balance as a freelancing consultant in STEM (Science, Technology, Engineering, Math). I am all about balance - between time and money, and also enjoying my money. I also post daily on Instagram @saverspender.

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5 Comments

  1. John

    Where did you get these stats?

    Someone who is in mid life has $240,000 in cash (or cash equivalents)?
    How is that possible when surveys say 6 in 10 can’t weather missing a single paycheck. I think there is some pipe dreaming here

    Reply
    1. Sherry of Save. Spend. Splurge.

      Statistics CanadaStatistics Canada

      These are averages. Some people don’t have any debt at all and their houses and cars paid at a young age like me (35), whereas some people my age are deep into debt. An average would mean if my net worth is $917K, and someone’s is -$100K, our average would be $408K

      Cash and cash equivalents are GICS, bonds, actual cash, savings accounts, etc.

      Some people carry a big cash balance – I have over $100K in cash alone, so does my partner.

      Together, one household with $200K in liquid savings, and I am sure some people have more than that.

      If I had GICs or bonds, that number would go up but I don’t invest in that.

      Reply
  2. Real estate was deemed an essential workplace during COVID-19 – here’s 3 reasons why. – df.

    […] came across some interesting charts by savespendsplurge.com that illustrate this […]

    Reply
  3. GYM

    Cool thanks for the mention! This is so interesting with all the statistics.

    Reply
    1. Sherry of Save. Spend. Splurge.

      Really makes you think!

      Reply

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