A new study from Environics Analytics has proclaimed Vancouver the first “city of millionaires” in the country, as the average net worth of homes in metro Vancouver has officially exceeded $1 million, and it turns out the chaos of B.C.’s housing market in 2016 isn’t entirely to blame.
The study concluded that a 7.1% rise in the average net worth of metro Vancouver homes throughout 2015 pushed it to about $1,036,000 by the end of the year. Second in the rankings was the metro Toronto area, which had an average net worth of $962,993 (5.4% increase), followed by Greater Victoria at $912,362 (3.4% increase) and Calgary at $898,240.
Peter Miron, EA’s vice president of economic data, has cautioned that the recent slowdown in the Vancouver market due to the foreign buyer tax could put the city’s “millionaires” nickname in jeopardy. “While we expect real estate in Vancouver to continue to rise overall in 2016,” Miron said, “the introduction of the recent land transfer tax on foreign nationals may dampen demand for real estate in the future.” Other areas, such as Calgary, have seen decreases in the average net wealth of households due to falling oil prices. “A drop in oil prices really shook the confidence of consumers in those markets and generally they have shied away from investing in real estate in those markets,” he said.
Of course, EA’s latest study has not factored in the latest monthly changes in the metro Vancouver market. “If we used last month’s effects on these neighborhoods, we might only have one sale, so it becomes very unreliable,” Miron said. “We always prefer to use one year of data to get these small area estimates.”
The annual study from Environics Analytics combines financial statistics in 178 categories – including consumer debt, equity holdings, disposable income, retirement savings, and liquid assets – from 38 sources, including Statistics Canada, the Bank of Canada, and a number of credit-rating agencies.