Toronto getting richer as Canada gets poorer, study finds
According to a recent study looking at wealth trends in Canada, the average net worth in Toronto went up over the past year, even as the national average went down. But not all of the Toronto area is getting richer.
The study, published by Environics Analytics, found that the average net worth per household — defined as assets minus debt — in the larger Toronto area grew by $518, or 0.1 per cent in 2018 to $977,698.
But the picture changes when the area is viewed in its parts. The City of Toronto, which includes former municipalities such as East York, Etobicoke and Scarborough, saw household wealth rise by $6,453 or 0.7 per cent to $959,946, while the rest of the Toronto census metropolitan area (CMA) declined by $6,058 or minus 0.6 per cent from just over a million to $997,012.
Nationally, the report showed the worth of the average Canadian household fell for the first time since the financial crisis of 2008 as growing debts, shrinking pensions and declining liquid assets took their toll.
Real estate is a big part of the trend, said Environics research and development senior vice-president Peter Miron, who cited a strengthening in Toronto real estate prices versus a “tepid” showing in other areas of the Toronto CMA. The inverse was the case in Vancouver where city real estate values dropped versus increases in the outer suburbs.
Across the country, the average Canadian net worth dropped by $7,594 or 1.1 per cent to $678,792 last year as increases in the housing market were more than offset by the late 2018 stock market correction, higher debt levels and a downward tick in pension plan values, Toronto-based Environics said.
The average home gained $6,336 in equity or 1.6 per cent, while the stock market downturn erased an average $10,045 and debt levels increased by an average of $3,309 or 2.3 per cent, the marketing and analysis company said. Pension plans lost an average of $576 or 0.4 per cent, it said.
And while net worth growth in Toronto outpaced outlying areas, Miron noted that those areas remain wealthier on average than in the City of Toronto, where home ownership is lower, although the advantage of the outer suburbs over the inner city narrowed from 2017 to 2018.