Your browser is not supported. We do our best to optimize our websites to the most current web browsers. Please try another browser.
Skip to main content
ADVERTISEMENT

Canadians Will See the Biggest Drop in Net Worth On Record, RBC Reports

Person with black piggy bank and coins
Pexels

It’s no secret that Canada is predicting a recession in early 2023. With this in mind, it’s important to understand why it’s happening and what this means for your finances.

ADVERTISEMENT

According to a new report by RBC, Canadians amassed $3.9 trillion in net wealth thanks to a roaring housing market and a surging stock market during the pandemic. In fact, the study found that the real estate boom drove some home values 52 percent higher.

But right now, the market is experiencing a drop in those gains. The report states that the housing-charged boom in Canadian net wealth is now over. As a result, Canadian net worth will fall at the fastest pace in decades.

“The dramatic decline in net wealth, combined with rising prices and higher interest rates, will cut roughly $15 billion from household spending in 2023,” the report states. “This is one of the factors that will drive Canada into a recession early next year.

Related: This is How the Average Canadian’s Net Worth Stacks Up to Home Sale Prices – by Province

Real estate agent talking to a couple
Getty Images

 

Preparing for a recession

Looking back on the pandemic, economists found that renovations and home furnishings helped drive the initial consumer spending recovery after pandemic lockdowns. Remember how many people were improving their newly minted home offices, revitalizing their backyard into a staycation paradise, or outfitting newly-purchased homes?

As a result of the interest rate hike on mortgages and inflation, more Canadians need to prioritize essentials like groceries, gas and paying off their debt (including their mortgages). While higher interest rates could mean a higher mortgage payment for many, the silver lining is that it continues to cool down Canada’s housing market. With fewer bidding wars and less extreme housing prices, there’s a chance a first-time buyer’s dream home might be within reach one day after all.

 

ADVERTISEMENT

Feature image courtesy of Pexels. 



Latest News

Viva la Magenta! Pantone's colour of the year is here, and we're tickled pink.
December 6, 2022
Learn how to make the perfect holiday wreath that adds a lovely, cozy touch to your outdoor decor.
December 5, 2022
Filled with colour and whimsy, this retro Calgary home inspired by the 1960s and '70s is right on trend for 2023.
December 5, 2022
These chic and sweet Christmas decorations have caught our eye — and our holiday-loving hearts.
December 4, 2022
Surprise your guests at your holiday party with this festive winter wonderland centrepiece!
December 3, 2022
A serious plant lover like Pamela needs a potting shed as beautiful as her roses.
December 2, 2022
Celebrate the most wonderful time of the year without breaking the bank.
December 2, 2022
Beautiful antiques, simple furnishings, and accessories fill this influencer's cozy, coastal historic New Brunswick home.
December 1, 2022
We're sharing how to get Ellen's luxury look for less.
December 1, 2022
ADVERTISEMENT
ADVERTISEMENT
This content is restricted to adults of legal age.
Please enter your birthdate to confirm.
Date of Birth