Canadian household wealth surged to a new collective high of $17.49 trillion in the fourth quarter of 2024, after gradually increasing over the past six quarters, according to data from Statistics Canada. Canadian households saw their net worth climb 5.77 per cent over the year to reach $1,026,205 on average by the fourth quarter, fuelled by strong financial asset gains. However, economists aren’t sure whether this momentum will be sustained, especially with the U.S.-Canada trade war and recession forecasts looming overhead. The Financial Post’s Serah Louis breaks down the current state household wealth — and what a period of massive uncertainty means going forward.
Canadian households are worth more than $1 million on average
Canadian households saw their net worth climb 5.77 per cent over the course of 2024, crossing the $1 million mark for the second time in the fourth quarter to reach $1,026,205 on average per household.
The gains mark a 30 per cent jump since 2019, when the average household net worth was $788,619. Average household net worth briefly eclipsed the seven-figure mark during the COVID-19 pandemic at the end of 2021 but slipped below $1 million in the second half of 2022. The first quarter of 2024 saw household net worth inch forward to cross $1 million on average again and it sustained this level over the next three quarters.
Overall, Canadian household wealth reached a record high of $17.49 trillion in the fourth quarter of 2024, after gradually increasing over the past six quarters.
James Gauthier, a senior economic analyst for the national economic accounts division at Statistics Canada, said household wealth gradually increased over the past year as inflationary pressures and interest rates declined.
Average wealth can be skewed by the wealthiest households, but even when looking at the middle quintile — the middle 20 per cent — which is more representative of the typical Canadian household, wealth still rose over the course of the year.
That third quintile ended the year with $518,415 in wealth on average, up 5.3 per cent year-over-year.
“It’s (still) fairly impressive,” said Jim Davies, professor emeritus at the University of Western’s economics department. “The average household having half a million dollars in net worth is definitely a good sign.”
The wealthiest (top 20 per cent) accounted for nearly two-thirds of Canada’s total net worth in the fourth quarter, averaging $3.3 million per household. In comparison, the bottom 40 per cent of the wealth distribution made up just 3.3 per cent, averaging $84,600 per household.
Millennials and generation X net worth climbed 10 per cent
Millennials and generation X grew their wealth by more than 10 per cent, significantly more than baby boomers (2.6 per cent) and the pre-1946 generation (four per cent).
Toronto-Dominion economist Maria Solovieva said millennials saw major increases from their financial assets (this includes currency and deposits, bonds, mortgages and equities), which grew by about 15 per cent, with smaller increases in real estate (3.6 per cent).
Between 2023 and 2024, millennials built up their savings as well, a 59 per cent boost from $14,894 to $23,716 per household.
‘I think the major factor is their wage growth, and we’ve been seeing it year (over) year for several quarters now,” Solovieva said, but noted the impact of the U.S.-Canada trade war could put a stopper on this growth, potentially even reversing in the third quarter of 2025.
“That probably will have an effect on all generations, (but) especially on the millennials, because they’re … in their major years of earnings currently.”
Gauthier said younger generations are also more focused on building wealth, compared with the baby boomer and pre-1946 generations, who are more likely to withdraw from their pensions and retirement accounts.
Baby boomers still boast the most wealth on average ($1.4 million), compared with millennials ($633,467), thanks to significant real estate and financial assets.
An October poll from Scotiabank found homeownership rates have plunged among younger Canadians aged 18 to 34, from 47 per cent in 2021 to 26 per cent in 2024. In comparison, homeownership remains a key driver of wealth for older Canadians.
The youngest age cohort, those under 35 years, were the only age group to continually decrease their mortgage debt since the end of 2022. Statistics Canada attributed this decline partly due to higher interest rates and housing costs making homeownership less affordable for young buyers.
Financial assets drove wealth gains
The lion’s share of household wealth is coming from stock market gains, with financial assets ballooning by nearly 10 per cent, over any sizable gains in real estate, which inched up by just under one per cent, year-over-year.
The S&P 500 index returned more than 23 per cent in 2024, marking a second straight year of 20 per cent or better returns. The S&P TSX also hit record highs, gaining more than 18 per cent the same year.
That said, Gauthier added that while real estate values declined and fluctuated over 2022 and 2023, they began to stabilize and increase moderately over the past year.
Home prices picked up 2.5 per cent in December (compared with the same month the previous year) and were up one per cent overall in 2024 compared with 2023, according to the Canadian Real Estate Association (CREA).
Thomas Lemieux, an economist and professor at the Vancouver School of Economics at the University of British Columbia, said household wealth can depend on who already owns a home.
While older generations are more likely to be homeowners and probably purchased these homes at relatively lower prices, reaping the benefits of real estate growth over many years, younger Canadians entered the housing market at a time fraught with sky-high prices and experienced little growth in real estate values in the aftermath.
Generation X currently boasts the greatest average real estate wealth, at $666,146 per household, followed by baby boomers at $550,994 per household. Millennials’ average real estate wealth is $433,793 per household, although they saw the biggest year-over-year change in these assets (3.64 per cent).
Quebec and Prairies see biggest wealth gains
Households across all provinces saw their net worth increase over the past year. But wealth in Quebec households swelled the most, by more than seven per cent, and the Prairies weren’t far behind in gains.
These regions saw the greatest growth in their provincial gross domestic product over the past year, a Royal Bank of Canada report earlier this month said.
Here is how the provinces fared over the past year with average 2024 household wealth in the fourth quarter compared with Q4 in 2023 the following:
The wealthiest provinces are still Ontario and British Columbia with more than $1.2 million in average household net worth, though this is largely the result of elevated real estate values in parts of those provinces.
The Canada Mortgage and Housing Corporation (CMHC) released a housing supply report in September noting that buyers in more affordable markets, such as Calgary and Edmonton, have been more resilient in the face of housing cost increases, with homeownership costs relative to incomes in those metro areas remaining about half of those in Toronto and Vancouver.
“Alberta has also seen stronger economic growth, with real gross domestic product (GDP) per capita outpacing Quebec, Ontario and British Columbia by about 30 per cent in recent years,” the report said. “This, along with growing remote work opportunities and a more affordable housing system, has led to significantly higher migration to Alberta from other provinces since 2022.”
While growth in financial assets was evenly spread across the country, Gauthier said more people have been moving from Ontario and British Columbia to the Prairies for job opportunities in the oil and gas sector, lifting the average disposable income as well as average net worth in that region.
It’s unclear whether wealth will continue to expand in 2025
Although historical trends suggest household wealth will continue to climb over time, economists have concerns about a potential recession this year.
“It’s unlikely that we’re going to see much growth in wealth just because (it looks like) it is not going to be a great year for either the stock market or the real estate market,” said Lemieux.
Davies said the U.S.-Canada trade war will create a drag on the economy, affecting Canadians across the board, either through layoffs or losses in business income. This could cause Canadians to increase their debts or reduce their financial assets.
“That’s especially true for the lower wealth groups or for the younger people,” Davies said.
Lemieux noted Canada’s rising unemployment rate, which hit 6.9 per cent in April, and said typically during an economic downturn, the unemployment rate goes up. He was concerned younger Canadians just entering the labour market could be most affected.
“(People) build wealth (through) investing in the stock market and housing,” Lemieux said. “But first you need some income to be able to buy these things and grow your wealth.”
Real estate assets make up a larger portion of household wealth for Canadians in the third and fourth wealth quintiles, Davies said, and housing values could remain steadier over 2025 compared with the stock market, which has been experiencing wild swings in response to tariff and other policy announcements by U.S. President Donald Trump .
Financial assets account for a much larger percentage of net worth for the wealthiest Canadian households, which means they are more susceptible to volatility in the stock market, affecting their wealth figures and therefore overall household wealth figures as well.
“If the stock market (does) poorly this year, by the end of 2025 this average (net worth) may well (go) back below a million dollars,” Davies said.
• Email: slouis@postmedia.com
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