Net real estate value in Canada has fallen by almost a trillion dollars
New data from Statistics Canada has surfaced.
Canadian households faced a nearly $1 trillion CAD ($775 billion USD) decline in home equity in the second quarter amid falling home and stock prices.
Statistics Canada summed up the first half of 2022, which was marked by surprising changes in the housing market, and released a report showing that the value of residential real estate owned by households fell by $419 billion CAD in the three months from April to June, while financial assets fell by $531 billion CAD.
Overall, household equity declined 6.1 %, or $990 billion CAD, the largest drop in recorded history.
Higher global interest rates are not only destroying household wealth in Canada, but also exacerbating the long-term slowdown in the country's economy. According to the statistics agency, the average resale price of a home is down 10.5 % from the first quarter.
The Bank of Canada raised the rate to 3.25% on September 7 and is expected to raise it again next month by another half-point. Until March, the rate had been held at a steady low of 0.25%.
