Canadians better off than they think: report
Despite shouldering record-levels of debt, Canadians are actually richer than ever with household net worth eclipsing the $400,000 mark for the first time in history.
The average household's net worth grew by 5.8 per cent at the end of last year from $378,093 at the end of 2011, largely, due to roughly a 5 per cent increases in real estate values and savings, according to a recent report from Environics.
This keeps Canadian households ahead of their U.S. counterparts for the sixth straight year although, on a currency-adjusted basis, the gap isn't that dramatic.
In fact, that gap has actually narrowed a bit recently, largely because Canadians continue to borrow where most Americans seem to be saving a bit more. And U.S. housing prices are on the increase.
But will this gap continue?
Canadians hold more than twice as much real estate as Americans and, once mortgages are factored in, have almost four times as much remaining equity in their real estate, Environics reports.
All of which means if there's a housing correction in Canada like the U.S. has seen, household net worth will plummet, experts warn.
"At various stages last year, Canadian home prices were about 60 per cent above those of average U.S. home prices, which is off the charts. That accounts for the difference in net worth," Bank of Montreal chief economist Doug Porter maintains.
Has your net worth grown significantly? Are those gains real estate related or attributable to other assets?
By Gordon Powers, MSN Money
Got a question about investing, saving or retirement? Send Gordon an email and we might answer your question in a future column.