But slowdown in Metro Vancouver's real estate market could put that millionaire status in jeopardy
Rising real estate values have pushed the average net worth of Metro Vancouver households up over $1 million, making it Canada's first "city of millionaires," according to a study.
The Environics Analytics study claims the average net worth of Vancouver households rose 7.1 per cent last year to hit $1,036,202 by the end of 2015.
The study ranked Metro Toronto households in second, with an average net worth up 5.4 per cent to $962,993.
Greater Victoria was third at $912,362, up 3.4 per cent over the previous year.
Calgary was fourth at $898,240, a 2.5 per cent decrease over the previous year, which the study blamed on a 4.7 percent decline in real estate values.
Rising real estate
Peter Miron, vice-president of economic data at Environics Analytics, said Vancouver's wealth can be attributed to its rising real estate values, but cautions the recent slowdown in Metro Vancouver's real estate market could put that millionaire status in jeopardy.
"While we expect real estate in Vancouver to continue to rise overall in 2016, the introduction of the recent land transfer tax on foreign nationals may dampen demand for real estate in the future," he said.
Meanwhile, falling oil prices have pushed down the average net wealth of households in cities like Calgary, he notes.
"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.
The study was based on real estate values from 2015 and does not include the latest monthly changes in the market, Miron noted.
"If we used last month's effects on these neighbourhoods, we might only have one sale, so it becomes very unreliable," he said. "We always prefer to use one year of data to get these small area estimates."
This is the eighth year the firm has completed the study and all of the data used is based on neighbourhood averages rather than individual households, Miron said.
The annual study combines data from 178 financial statistics, including disposable income, liquid assets, retirement savings, and consumer debt and equity holdings from more than 38 sources, including the Bank of Canada, credit rating agencies and Statistics Canada, to estimate the average net worth of households in about 56,000 neighbourhoods in Canada.
It includes those who do and do not own property, but Miron said there was no evidence of a widening wealth gap in the data in recent years.
"There was no increase in polarization on the neighbourhood level, nor was there any decreasing polarization," he said.