In the first quarter of 2024, Canada’s national net worth experienced a significant increase, reaching $19.0 trillion, marking a 2.6% quarterly rise according to Statistics Canada.
Canadian households saw their net worth climb by $548.2 billion (+3.3%), totaling $16,925.0 billion in Q1 2024. This increase was driven by robust performances in both equity and housing markets. The S&P 500 Index surged by 10.2%, continuing its double-digit growth for the second consecutive quarter, while the S&P/TSX Composite Index rose by 5.8%. After two quarters of decline, the housing market rebounded, adding $213.0 billion to residential real estate values.
The value of households’ total financial assets hit a record high for the second consecutive quarter, growing by 3.6% (+$349.3 billion) to $10,022.2 billion. Non-financial assets also increased by 2.1% (+$207.6 billion). However, household financial liabilities, mainly composed of mortgage and non-mortgage debt, saw a modest increase of $8.7 billion (+0.3%), marking the slowest quarterly expansion since Q1 2023. Elevated interest rates continued to influence household borrowing decisions during this period.
The distribution of household net worth in Canada remains highly uneven. By the end of Q4 2023, over 90% of net worth was held by homeowners. The wealthiest 20% of households had an average net worth exceeding $3.3 million, while the lowest quintile faced liabilities surpassing their assets, highlighting a significant wealth disparity.
The household saving rate, seasonally adjusted, rose to 6.9% in Q1 2024, the highest since Q1 2022. This increase was attributed to a 1.8% gain in disposable income outpacing a 1.2% rise in nominal consumption expenditure.
Households added $15.5 billion to their currency and deposits holdings, the smallest accumulation since Q3 2021. Over the past year, households added $113.7 billion to deposits, compared to $161.3 billion in the previous year. In response to higher interest rates, households have shifted towards fixed-term deposits, which now account for 47.8% of all personal deposits at chartered banks, up from less than 30% in early 2022.
In Q1 2024, households acquired $23.8 billion in mutual fund shares, exceeding the total investment in mutual funds for all of 2023. The majority of these inflows were directed towards equity-focused exchange-traded funds (ETFs), driven by strong global equity performance, particularly in the technology sector. Conversely, inflows into money market funds were at their lowest since Q1 2022, reflecting a shift in investor preference towards higher-yielding assets.