Canadian young people are enjoying some success in building their personal wealth but are not faring so well on their day-to-day income levels.
It’s the difference between their personal income statement and their balance sheet. The latter is strengthening but the former is lagging. And, basically, it’s all about the real estate.
That’s the finding of a report prepared by RBC Royal Bank which shows people under the age of 35 have doubled their net worth in the past four years but the growth in their income levels has been the slowest of any demographic group.
CERB helped them build financial reserves during the pandemic while stock market gains and inheritances added further. Then there were the sizeable gains from property values since the pandemic coupled with lower mortgage debt, largely because many in this age group are still renting.
That is especially true in Ontario where the average age of a first-time home buyer has now reached 40.
The bank warns this could be a signal of trouble down the road as the traditional path of income leading to wealth accumulation is threatened.
