Canadian ‘Millionaires’ – “Look, unless you want to live in a cave, or move to another country, you can’t really spend any of that wealth”

From ‘Millionaire nation: Canada tops G7 rich list’, Financial Post, 6 May 2011
“For every 100 households in Canada, 12.6 [have total assets of] at least US$1-million. The United States, in contrast, suffers with only 8.9 millionaire families per 100 households. Germany is dead last with 8.7 millionaire households per 100.”
“…the Deloitte figures have produced an army of Canadian paper millionaires because they include home equity…”
“There’s a much greater concentration of wealth in a tangible asset, like a house, in Canada,” Stefane Marion [economist with National Bank Financial] said. “You may own the property as an asset, but there’s no cash flow.”
And with 40% of Canadian homeowners owning their home outright with no mortgage, it is no surprise that there is substantial wealth locked into property, he added.
“Look, unless you want to live in a cave, or move to another country, you can’t really spend any of that wealth,” said Avery Shenfeld, chief economist with CIBC World Markets.

[The article ends with caveats about methodology.]

The Canadian ‘Millionaires’ cannot realize their wealth; there is nobody for them to sell to. If 8% of them tried, the markets would crash. The US bubble has burst, Germany never had a bubble, the Canadian bubble will be bursting and thus rectifying the above statistical anomalies. – vreaa

8 responses to “Canadian ‘Millionaires’ – “Look, unless you want to live in a cave, or move to another country, you can’t really spend any of that wealth”

  1. Net Worth = Assets – Liabilities. By this definition Peter Pocklington was a millionaire right up to the point he had to declare bankruptcy.

  2. Ah but there are ways to “unlock” this wealth, albeit temporarily, through lines of credit and mortgage refis.

    You’re richer than you think.

  3. Ralph Kramden

    “Look, unless you want to live in a cave, or move to another country, you can’t really spend any of that wealth,” said Avery Shenfeld, chief economist with CIBC World Markets.

    > Truly the biggest bag of bunk I have read in a long time.
    This guy is an Economist?
    Where did he get his degree – in a case of Vodka?

  4. @Unagidon
    Let’s not get carried away. There are plenty of affordable areas in Canada and BC, and even the lower mainland. I’m sure young people are more sensible than the avg bear and won’t decide it’s “Vancouver or bust”

    • There may be ‘affordable’ places in BC and Vancouver, but the point is that you get far, far more for your buck in other places, and that differential will have an effect on the behaviour of a small number of buyers/sellers, AND prices are set at margin….

  5. I won’t open this debate vreaa. What you can price in terms of $ is more bang for your buck outside Canada. It’s what you can’t price that makes all the difference.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s