Last Updated: May 25 5:54 PM ET
A new survey out Monday, on the property wealth of high net worth individuals, should hit some Canadians right where they live.
Bank of Montreal found among its high net worth clients that primary residences were worth almost $1.5 million on average. Those clients were defined as having more than $1 million in investible assets.
On top of that, the survey found 36 per cent of those people own at least one second property worth on average $708,539. The bank says many of those people are tapping into equity in their primary residence to fund those additional property purchases.BMO didn’t calculate real estate wealth as a percentage of overall wealth, but the bank’s deputy chief economist Doug Porter says property isn’t just making the rich richer – all of us are becoming wealthier.
“Real estate has just been one of the fastest-growing assets,” said Porter, adding land and residential structures now account for about 39 per cent of total Canadian assets. “It’s above average [historically] but I don’t think it’s wildly out of balance.”
That percentage has been stable over the last five years but the economist notes that at one point – at the peak of the technology boom in 2000 – it was as low as 31 per cent.
Those percentages are likely even higher in some pockets of the country, such as British Columbia, where the average principal residence was $3.9 million for the high net worth crowd. Those people carry $236,100 in debt, according to the survey.
Do Canadians own too much property?
Most wealthy Canadians surveyed are free and clear of their mortgage and even among those with debt, the average amount they have outstanding is $176,000.
On the second property front, 80 per cent of respondents who have one, say it is in Canada. Another 27 per cent have property in U.S., 11 per cent in Europe, eight per cent in Central America, South America or the Caribbean, seven per cent in either Mexico or Asia and five per cent in Australia.