Using the most recent data from the Financial Security Survey (ESF) published by Statistics Canada, economist Geoffroy Boucher notes that family assets, i.e. the wealth accumulated over a lifetime, have evolved very unevenly since 2019.
Between 2019 and 2023, the value of wealth held by Quebec families increased from $2,417 billion to $3,008 billion.
However, families in the richest 10% alone captured 32.3% of this increase.
As for families in the poorest 40%, they only captured 11.2% of the growth in wealth.
Real estate as a source of enrichment
According to the economist, the increase in family wealth since the pandemic is largely explained by the marked increase in the value of real estate assets.
In Quebec, real estate is responsible for 59% of the increase in total family assets. The total value of real estate assets increased from $980 billion in 2019 to $1,352 billion in 2023 (in constant dollars).
In comparison, RRSPs (16%) and vehicles and other non-financial assets (14%), respectively in second and third place, follow far behind.
For Geoffroy Boucher, the significant growth in real estate risks widening inequalities between owners and tenants.
The weight of mortgage debt
If the value of assets held by families in Quebec increased by 23% between 2019 and 2023, that of debts – which constitute the second dimension of wealth – increased by 10%, observes the economist.
According to him, the increase in families’ financial obligations is attributable to the increase in mortgage debt, the total value of which increased from $288 billion in 2019 to $324 billion in 2023 (in constant dollars).
Quebec fares less well
In 2023, recalls the economist, the Observatory published a first portrait of wealth inequalities in Quebecwhich demonstrated in particular that wealth inequalities were much more pronounced than income inequalities.
In addition, this portrait also highlighted the fact that while Quebec positions itself as the least unequal province in terms of income, the province does less well in terms of heritage, ranking behind Ontario, British Columbia and the Atlantic provinces.
Underestimated inequalities
For Geoffroy Boucher, it appears that these inequalities are also underestimated, with the ESF data underestimating the importance of wealth held at the top of the distribution.
In fact, he indicates, the parliamentary budget officer noted problems of under-declaration or absence of data among families with very high assets within the ESF.
Interview:
Guest 1: Kristen Thompson, an acclaimed real estate agent with over 15 years of experience in the field
Guest 2: Dr. Sarah Johnson, a leading economist and expert in family finance and wealth distribution studies
Section 1: Real Estate and Family Wealth Amplification
Interviewer: How does the recent data from the Financial Security Survey (ESF) show the role of real estate in amplifying family wealth? Can you share insights on how real estate has been impacting inequality among families in Quebec?
Guest 1: Real estate has always been an attractive investment opportunity for families, as it provides a tangible asset with potential for long-term appreciation. In recent years, we’ve seen a surge in demand for properties in Quebec, particularly among investors, driving up prices and increasing the overall value of real estate across the province. As a real estate agent, I’ve witnessed firsthand how this trend has disproportionately benefited wealthier families who can afford to make larger down payments and compete in fast-paced markets. However, I also believe that real estate ownership can be a significant source of empowerment for families, providing them with a stable asset and the potential for financial growth.
Guest 2: The data from ESF reveals that real estate is responsible for 59% of the increase in overall family wealth in Quebec between 2019 and 2023. This highlights the central role that real estate plays in amplifying the wealth of families in the province. The pandemic has intensified this trend, with low-interest rates and remote work options driving demand for larger properties in suburban areas. Unfortunately, this has only widened the gap between homeowners and renters, as wealthier families enjoy the benefits of real estate appreciation while many others struggle to afford skyrocketing housing costs.
Section 2: Mortgage Debt and Financial Obligations
Interviewer: The ESF also shows a 10% increase in families’ financial obligations, mainly due to mortgage debt. How does this affect the overall wealth distribution in Quebec? Are there any specific groups of families that are particularly vulnerable to the weight of mortgage debt?
