Canadians getting wealthier ... and more in debt
Last Updated: Thursday, December 7, 2006 | 1:09 PM ET
CBC News
Canadian families dramatically increased their wealth in the last six years, but saw their debts rise too, according to a major study released Thursday.
The median net worth of Canada's 13.3 million "family units" (families, couples and unattached singles) was $148,350 in 2005, according to Statistics Canada's latest survey of financial security.
That's up almost 41.7 per cent from 1999, and up 23.2 per cent after taking inflation into account.
But the total debt load carried by Canadians grew almost 50 per cent in the same period. After adjusting for inflation, the median debt load rose 38 per cent to $44,500 per family.
Statistics Canada said the increase in assets over the last six years has been largely driven by soaring home prices and healthy stock market returns (which have also boosted pension plan assets).
The total value of Canadians' assets tied up in their principal residences jumped by 50 per cent between 1999 and 2005. Mutual fund and similar assets climbed 47.5 per cent, and private pension assets (which include RRSPs, RRIFs and company pension plans) rose by 41.7 per cent.
But the big rise in real estate values is also behind much of the big rise in debt levels. Total mortgage debt — which accounts for three-quarters of all debt — went up 47.5 per cent to $572 billion. Just over a third of all families reported having some mortgage debt.
Lines of credit increasingly popular
Lines of credit became a lot more popular in the six years between Statistics Canada's wealth surveys. Total debt held through lines of credit more than doubled to $68 billion. The median line-of-credit debt jumped 56 per cent to $9,000.
In 2005, the median family had $13.52 in debts for every $100 in assets, the federal agency said. That's up slightly from $13.06 in 1999.
The study found that almost three in every 10 Canadian families had no pension savings — meaning they had no company plan and no RRSPs. Almost two-thirds of families with incomes below $30,000 had no pension savings.
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