Victoria is in and Calgary is out — at least in terms of average household net worth. According to a new Environics Analytics report, BC’s capital became one of the three wealthiest cities in Canada last year, while Calgary lost that distinction.
The report considers 2015 information on 178 financial and investment statistics, and aims to provide a picture of the financial well-being of Canadian households. It shows that the average net worth of a Victoria household was $912,362 last year, up 3.4 per cent from the previous year. That puts the city in third place nationally.
Vancouver and Toronto were just ahead of Victoria at $1,036,202 and $962,993, respectively. Notably, in addition to being Canada’s wealthiest city, Vancouver is now the country’s first “city of millionaires” — according to Environics Analytics, no other city in Canada has ever had an average household net worth of over $1 million.
Calgary’s average household net worth of $898,240 put it in fourth place for 2015, two spots below its second-place finish the year prior. It was also in the top three in 2012 and 2013, and according to Environics Analytics, last year’s drop can largely be attributed to a 4.7 per cent decline in real estate values in the city.
Other cities affected by declining real estate values include St. John’s, Regina and Saskatoon. “The data suggest that the real estate market in these cities became a little overheated during the pre-oil devaluation boom,” explained Peter Miron, vice president of economic data at Environics Analytics, in the report. He expects the real estate markets in those cities “to remain cooler over the near term.”
BC represents the other side of the coin. Environics Analytics’ report shows that Vancouver and Victoria were able to claim their spots in the top three in large part due to the province’s “sizzling real estate market” — real estate values in the province reportedly rose 9.5 per cent last year. Above average growth in Ontario real estate values also helped Toronto into the top three, although its average household net worth was also buoyed by increases in the value of pensions and liquid assets.
For Miron, it’s unclear whether Vancouver will be able to retain its top spot. “While we expect real estate in Vancouver to continue to rise overall in 2016, the introduction of the recent land transfer tax on foreign nationals may dampen demand for real estate in the future,” he said. The 15 per cent tax came into effect on August 2nd, and already appears to be dampening Metro Vancouver home sales.
Despite differences from city to city, average household net worth in Canada as a whole increased by 4.3 per cent in 2015 to reach $680,098. “Overall, Canada is on course to continue modest but steady growth, with few obvious indicators of volatility on the horizon,” Miron concluded.