Most of Canada’s Wealth is Wrapped Up in Real Estate
A new report found that a sizable share of Canada’s wealth is tied up in real estate. Canada is known to be a wealthy country, with a GDP of over $2 trillion and a national wealth valued at over $11 trillion.
It appears that 76% of our national wealth is in real estate. In the third quart this year Canada’s total national wealth hit $11.415 trillion, and $8.752 trillion of that is in our real estate market.
This is the highest both numbers have been since 2007. Canada now has more money invested in real estate than even the US. Previously, that 75.3% of the US national wealth was in real estate while Canada only had 67.6%.
These numbers began to shift after the 2008 recession. Real estate share of national wealth in the US began to decline; meanwhile, it began to increase in Canada. This trend came as Canada saw consistent real estate growth. Canada’s land, residential, and non-residential structures value began to grow as well.
These numbers don’t surprise economists. The real estate share of national wealth lines up with the “sharp rise in home values” that has happened in major Canadian cities over the past decade. Vancouver and Toronto, in particular, have high real estate values, but now cities such as Montreal and Calgary are rising quickly too.
Experts say that this could be a concern if prices drop, but aren’t immediately concerned. Flat prices aren’t a big deal; only sharp drops would impact the Canadian economy.
Most experts agree that even though Canadian real estate is cooling off some, the market is actually stabilizing. While there is no longer sharp increases in value there also likely will not be any sudden declines.