Canada's richest getting richer, thanks in part to increases in housing prices
OTTAWA - The gap between Canada’s richest and poorest widened between 1999 and 2005, thanks in part to an increased value of housing, according to new data from Statistics Canada.
The study, published Wednesday in Perspectives on Labour and Income, ranked family units into five groups from the lowest net worth to the highest. (Net worth is the amount an individual or family would clear after selling all assets and paying off all debts.)
Between 1999 and 2005, the median net worth of families in the top fifth of the wealth distribution increased by 19 per cent, the study said, while the net worth of their counterparts in the bottom fifth remained virtually unchanged.
In other words, the richest got richer and the poorest stayed poor.
Last year, those in the top 20 per cent of the wealth distribution had a median net worth estimated at $551,000. In 1999, it was $465,000 and in 1984 it was $336,000.
At the other end of the spectrum, the median net worth of the families in the bottom fifth stagnated between 1984 and 2005. The value of their assets never exceeded the value of their debts during that period.
As a whole, the median net worth of all Canadian families in 2005 was $84,800, up from $74,400 in 1999. Part of that growth in net worth - among families in the top 20 per cent of the distribution - was fuelled by increases in the value of housing. At least 95 per cent of these families owned a house in the six-year period of the study and during that time, the median value of their principal residence rose a solid $75,000, reflecting sharp increases in housing prices, the study said.
Only six per cent of families in the bottom 20 per cent owned a house during the study period and the value changed little.
There are other reasons behind the wealth concentration, the study explained. Growing income dispersion over the last decade also contributed to the growing wealth inequality between families. In the 1990s there was an increase in inequality in family after-tax income, the study noted.
Age however, was not a factor behind the growth in wealth inequality between 1984 and 2005. In fact, while the median wealth of families rose 26 per cent between 1984 and 2005, it fell among families where the major income earner was between 25 and 34.
In 2005, these families had median wealth holdings of $13,400, much lower than $27,000 in 1984.
This drop was due mainly to the fact the earnings of young men fell substantially between the 1970s and 1990s.
The study was based on results of the 1984 Assets and Debts Survey, and the Survey of Financial Security conducted in 1999 and 2005.
The study, published Wednesday in Perspectives on Labour and Income, ranked family units into five groups from the lowest net worth to the highest. (Net worth is the amount an individual or family would clear after selling all assets and paying off all debts.)
Between 1999 and 2005, the median net worth of families in the top fifth of the wealth distribution increased by 19 per cent, the study said, while the net worth of their counterparts in the bottom fifth remained virtually unchanged.
In other words, the richest got richer and the poorest stayed poor.
Last year, those in the top 20 per cent of the wealth distribution had a median net worth estimated at $551,000. In 1999, it was $465,000 and in 1984 it was $336,000.
At the other end of the spectrum, the median net worth of the families in the bottom fifth stagnated between 1984 and 2005. The value of their assets never exceeded the value of their debts during that period.
As a whole, the median net worth of all Canadian families in 2005 was $84,800, up from $74,400 in 1999. Part of that growth in net worth - among families in the top 20 per cent of the distribution - was fuelled by increases in the value of housing. At least 95 per cent of these families owned a house in the six-year period of the study and during that time, the median value of their principal residence rose a solid $75,000, reflecting sharp increases in housing prices, the study said.
Only six per cent of families in the bottom 20 per cent owned a house during the study period and the value changed little.
There are other reasons behind the wealth concentration, the study explained. Growing income dispersion over the last decade also contributed to the growing wealth inequality between families. In the 1990s there was an increase in inequality in family after-tax income, the study noted.
Age however, was not a factor behind the growth in wealth inequality between 1984 and 2005. In fact, while the median wealth of families rose 26 per cent between 1984 and 2005, it fell among families where the major income earner was between 25 and 34.
In 2005, these families had median wealth holdings of $13,400, much lower than $27,000 in 1984.
This drop was due mainly to the fact the earnings of young men fell substantially between the 1970s and 1990s.
The study was based on results of the 1984 Assets and Debts Survey, and the Survey of Financial Security conducted in 1999 and 2005.
© CanWest News Service 2006