Principal residences are both the biggest asset and biggest debt for many households in the province of Quebec. Because of high house prices, principal residences accounted for a full 28.1% of Quebec households’ assets in 2016. But how have changing house prices and homeownership rates affected households’ net worth over time?
CMHC’s latest Housing Market Insight for the province looks to provide answers to this question. Using Statistics Canada’s Survey of Financial Security, 2016, we explore changes in households’ net worth from 1999 to 2016.
- Quebec households’ net worth grew by 81.8% from 1999 to 2016. Principal residences were a big part of this increase. Why? Because the share of total assets they accounted for grew, while the share of total debts they accounted for decreased.
- During the period, house prices grew significantly. The homeownership rate also grew, although to a lesser extent. These 2 factors caused the share of Quebec households’ total assets accounted for by principal residences to grow, too.
- Still, from 1999 to 2016, Quebec households saw lower growth in their average net worth than all Canadian households together. This is partly because the homeownership rate and growth in house prices were relatively lower in Quebec.
- Households aged 65 and over were the age group with the greatest decrease in their rate of principal residence ownership. This is because retired households increasingly moved back to the rental market from 1999 to 2016.
As far as we know, this Insight is the only study fully analyzing the role of principal residences in Quebec households’ net worth. We look at the principal residence as both an asset and as a liability. This approach lets us go beyond the classic debt analysis. We put the rise in households’ mortgage debt in perspective with the increase in the value of their residence.