A recent report from Statistics Canada reveals that younger Canadians are significantly increasing their net worth, largely driven by a surge in homeownership. Between 2019 and 2023, the median net worth for families with a highest earner under 35 years old soared from $56,400 to $159,100—an impressive 180% increase.
The Rise of Young Homeowners
One of the most striking findings is the increase in homeownership among Canadians under 35, which rose from 35.8% to 44.4%. This age group saw the largest percentage increase compared to others, highlighting a growing trend of young people entering the housing market. John Nicoletta, chief of Statistics Canada’s Centre for Income and Socio-Economic Well-Being Statistics, noted, “We definitely have a lot more younger homeowners,” in an interview with Yahoo Finance Canada.
These statistics contrast with other recent surveys indicating a decline in homeownership among younger age groups. However, the larger sample size of this particular survey—40,000 participants, double that of previous cycles—provides a more comprehensive view of the housing landscape.
Factors Behind the Growth
The significant rise in homeownership is primarily attributed to escalating home values and a renewed emphasis on owning property. Homeownership has become a high priority for younger Canadians, impacting their overall financial health and net worth. Nicoletta pointed out that home values have been a major contributor to this trend, reflecting the central role of homeownership in wealth accumulation.
The overall median net worth of Canadians also saw a substantial increase, rising from $381,100 in 2019 to $519,700 in 2023—a 36% boost. Adjusted for inflation, these numbers reveal a notable enhancement in financial stability for many households.
Wealth Disparities Among Homeowners
The survey highlights stark differences in net worth between homeowners and non-homeowners. For those aged 55 to 64 with homes and employer-sponsored pensions, the median net worth reached a staggering $1.4 million, while those without either stood at only about $12,000. This disparity underscores the critical importance of homeownership in building wealth in Canada.
However, some experts, like Dan Skilleter from Social Capital Partners, warn against an over-reliance on real estate as a pathway to financial security, describing the current fixation on homeownership as “dysfunctional.”
Debt and Financial Strategies
Interestingly, while the under-35 cohort has seen dramatic growth in net worth, their financial situation remains in line with what’s expected at the beginning of their careers. The median net worth for those aged 35 to 44 was approximately $409,000—almost triple that of the younger group. Additionally, younger Canadians are taking on more debt, with mortgages in the under-35 category rising from 31.2% in 2019 to 36.4% in 2023.
Notably, a growing number of younger Canadians are also accumulating wealth without homeownership. In 2023, 15% of renters under 35 had a net worth exceeding $150,000, up from just 5% in 2019. These individuals typically hold assets like real estate outside of their primary residence, Registered Retirement Savings Plans (RRSPs), and Tax-Free Savings Accounts (TFSAs).
Conclusion
The data from Statistics Canada paints a dynamic picture of younger Canadians and their increasing net worth, driven largely by rising homeownership rates. While the gains are significant, they also highlight underlying challenges in the housing market and the broader implications for financial security in Canada. As homeownership continues to play a vital role in wealth accumulation, understanding these trends will be essential for policymakers and financial advisors alike.
