76% of Canada’s national wealth is in real estate

76% of Canada’s national wealth is in real estate, Vladimir Volenyuk

Everyone wants to live in a big house, with many rooms and the property big enough to drive around in a golf cart, with a pool and four-car garage, but not everyone can afford it, especially counting the fact that after purchasing a house like this for a hefty price, you will have to pay annual taxes on the property that could reach like $40-50 thousand dollars annually.

Statistics Canada released last week its third-quarter report on national wealth, which is the “value of non-financial assets in the Canadian economy.”

Total national wealth hit $11.415 trillion in the third quarter, and at $8.752 trillion, real estate made up a 76-per-cent share of that figure — nearly all but a quarter. That was the highest that both figures had been, going back to the second quarter of 2007.

Canadian land values grew consistently from the first quarter of 2009 up to the first quarter of 2017, going from just over $2 trillion to about $4.2 trillion in that time frame.

But then values started to level off, dropping to $4.1 trillion in the third quarter of 2017. Values grew again, but the growth hasn’t been as consistent since then as it had been over the past decade. The value of residential and non-residential structures has also grown over that time.

Residential investment makes up 7.5 percent of Canada’s economy, which is just off a historic peak.

Winnipeg is a big city and it grows every year in the population and accordingly in the number of new houses built and old ones sold. In total, nearly 700 homes are on sale in the city, valued at $ 1 million and above.

Only in 1996 in Winnipeg appeared the first house at the cost of more than 1 million dollars. According to the Winnipeg Association of Realtors, for two decades, amid a steady boom in the real estate market, more than 40 homes in this price range are sold every year in Winnipeg.

And although most of these luxury homes are located in the traditionally wealthy neighborhoods of the city, such as Wellington Crescent, Old Tuxedo and along South Drive, they are increasingly appearing in new suburban neighborhoods.

Peter Squire, a spokesman for the association, says many factors explain the rise in the number of expensive homes.

"Over the past few years, construction costs have increased significantly, materials and all the amenities that meet the requirements of the buyer, bring these houses to a price of more than a million dollars," he says.

However, Squire says that Winnipeg prices fade in comparison when looking at the whole country. “Prices have certainly gone up, but when you compare us with cities like Calgary and Edmonton, there are much more houses for a million or more dollars,” he said. Currently, the most expensive house ever sold in Winnipeg is estimated at $ 9.9 million. It was put up for sale in 2015 for $ 11 million.

In 2012, Prime Minister Brian Pallister, then the leader of the opposition, bought a $ 2 million mansion at Wellington Crescent, located on a 1.7-acre bank of the river, with annual property taxes of $ 38,000. At the time, it was the second largest residential property transaction in the history of Winnipeg.

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