Canadian net worth drops $4,600 per household - Action News
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Canadian net worth drops $4,600 per household

The sharp drop in the stock market cut Canadian's net worth by $4,600 per household in the third quarter, Statistics Canada reported Tuesday.

Household debt up $600

The sharp drop in the stock market cut Canadian's net worth by $4,600 per household in the third quarter, Statistics Canada reported Tuesday.

"Although residential real estate assets increased, this was more than offset by the decline in the value of household holdings of equities (including mutual funds) and pension assets," the agency said.

Meanwhile, Canadians continued to borrow, driving household debt per capita up by $600 from thesecond quarter and $2,200 over a year, to $46,100.

Total household debt increased to $1 trillion inmortgages and $448 billion in consumer credit debt.

Bank of Canada Governor Mark Carney warned Monday thatCanadian households need to end their spending splurge, particularly on homes, becausedebt levels have reached 149 per cent of income, higher than in the U.S. or Britain. But the Statistics Canada numbers released Tuesday put the debt level even higher, at150.8 per cent of income.

The rise reflected higher borrowing as well as flat personal disposable income, Statistics Canada said.

The 2.1 per cent drop in household net worth,to $180,100 in the third quarter from $184,700 in the second quarter, followedthe 12-per-cent slide in the benchmark Toronto Stock Exchange indicator. "This marked the sharpest quarterly reduction in stock prices and per capita household net worth since the fourth quarter of 2008," Statistics Canada said.

It was the second quarter in a rowin which household net worth fell.

Total national net worth increasedone per centto $6.5 trillion, a slower pace than in the 1.3 per cent gain in the second quarter.

Government net debt (at book value) increased to $795 billion in the third quarter, compared with $772 billion in the second quarter.Total government net debt was 46.9 per cent of gross domestic product in thethird quarter, up from 46.3 per cent in the second quarter.