We're worth $40,000 more per household than the Americans!! Our per capita net worth - approximately $360,000 per household - is now well above that number for the US - just north of $320,000. When Environics Analytics released the big stat a few weeks back, I had a hunch that it was all about the Canadian real estate picture where there is a gaping lead by Canadian households. I was right. Our liquid financial assets per household (stocks, bonds, GICs etc) amount to app. $200,000, while in the US that figure is above $285,000 - over 40% higher. Americans are still much more liquid in the aggregate. And last time I looked their stock market was starting to leave the TSX in the gold-digging, multi-fracking dust. Also, look at the disposable income number per household ($98,000 in US vs our $56,000) and you realize that Canadian wealth superiority may be an optical illusion. It may be due to a thing called productivity, the ultimate forecaster of wealth creation.
So this "Kodak" moment of Canuck net worth swagger may be just that. It's all about our home equity when it comes to our balance sheet superiority, but like every asset class cycle since the invention of assets, we are at the top. We all know that, but we just don't know what a real estate correction in Canada looks like and we have to live somewhere after all. Finally, real estate is a local market: Regina home prices, and Laval home prices run on completely different fundamentals once we strip out the commonality in mortgage costs. But the bottom line is this: Canadians are underweight in financial assets, especially equities, and alarmingly underweight in foreign equities. (I will address this in my next entry).
It looks like my view is supported by National Post columnist Terence Corcoran. Post readers will recognize Corcoran as the true champion for free markets and a persistent critic of over regulation and nanny state babysitting.
Here is the link to his article about our 15 minutes of net worth fame.(good read)
Here is the net worth "scorecard" from that article: