In the latest edition of its WealthScapes analysis, marketing services firm Environics Analytics noted that Vancouver has become the first “city of millionaires” in Canada thanks to the vibrant engine of a red-hot real estate market.
The study revealed that Vancouver’s average household net worth reached $1,036,202 over the past year. This corresponded to a 4.3 per cent growth in the national average household net worth (up to $680,098) and a 6.3 per cent increase in B.C. households’ net worth (up to $883,049) during the same period, The Globe and Mail reported.
Theoretically, this makes Vancouverites extremely wealthy compared to the rest of the country, considering that the increase in value of their properties outpaces the 4.1 per cent growth rate (up to a $133,170 average over the last 12 months) of household debt nationwide.
However, the report added that consumers and industry players should remain vigilant of troubling developments bubbling just beneath the surface.
“Canada is really a tale of two economies at the moment,” Environics Analytics vice president of economic data Peter Miron said. “We saw the oil-based provinces, especially metro centres, really taking a beating relative to the rest of Canada. Those provinces are facing significant headwinds. They might not necessarily be in a recession, but they are definitely struggling.”
“The big worry on our radar at the moment is Vancouver,” according to Miron, who developed the WealthScapes analysis. “It’s basically only real estate that’s fuelling growth in Vancouver.”
And while no signs of a major crash are apparent at the moment, Miron cautioned that the new foreign buyers’ tax in B.C., the sluggish performance of oil, and the possibility of the U.S. Federal Reserve raising interest rates will all play a role in determining the actual value of Canadians’ assets in the near future.
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