A Statistics Canada report released in late December revealed that real estate accounted for as much as $8.752 trillion of the nation’s total wealth during Q3 2018.
This represented approximately 76% of Canada’s wealth during that quarter, estimated to be at $11.415 trillion.
Such a top-heavy set-up might prove problematic in the event of a “sharp, sustained correction in house prices given the wealth effect on spending,” BMO senior economist Sal Guatieri told Global News.
Read more: Investors have little to fear of a housing meltdown
Guatieri admitted, however, that this trend appeared inevitable in light of the “sharp rise in home values” observed in red-hot markets like Toronto and Vancouver over the past decade.
From Q1 2009 up to Q2 2017, the total value of Canadian real estate grew from around $2 trillion to approximately $4.2 trillion. This subsequently moderated, relatively speaking, to $4.1 trillion in Q3 2017.
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