Canadian national net worth increased 1.2% to C$6.4T in Q2, on a per capita basis, national net worth was C$186,900, versus C$185,300 in Q1
September 13, 2011
– National net worth increased 1.2% to $6.4 trillion in the second quarter. On a per capita basis, national net worth was $186,900 in the second quarter, up from $185,300 the previous quarter.
Among non-financial assets, residential real estate remained the major contributor to the increase in national wealth during the quarter, accounting for over half of the gain.
Drop in share values reduces household net worth
Household net worth fell 0.3% in the second quarter, as the increase in the value of residential real estate was more than offset by the decline in the value of household holdings of equities (including mutual funds) and pension assets. The Standard and Poor's / Toronto Stock Exchange composite index fell 5.9%. Per capita household net worth fell from $185,500 in the first quarter to $184,300 in the second quarter, marking the first decline since the second quarter of 2010.
Credit market debt of the household sector grew in the second quarter, as a result of both higher mortgage and consumer credit borrowing. The ratio of household credit market debt to personal disposable income ratio was up, as debt levels grew faster than the growth in personal disposable income. The debt-service ratio was unchanged from the previous quarter at 7.5%. Home owners' equity as a percentage of real estate assets edged down further in the second quarter, as the credit market debt to net worth ratio increased for the fourth straight quarter to 24.4%.
Government net debt up
Overall government net debt (expressed at book value) increased to $772 billion in the second quarter from $753 billion the previous quarter. The ratio of net debt to gross domestic product rose from 45.7% in the first quarter to 46.3% in the second quarter. Bonds led the increase in total government debt in the second quarter, with significant net issues for both federal and provincial governments.
Corporate debt to equity edges up
Debt financing by private non-financial corporations edged up while equity issuances slowed. Total credit market debt to equity (expressed at book value) increased from 54.2% in the first quarter to 54.9% in the second quarter.
Overall total asset growth of institutional investors (such as trusteed pension plans and mutual funds) slowed in the second quarter. The value of investments in shares decreased in the second quarter. This was offset by an increase in the value of holdings of federal and provincial government bonds.