Canadian household net worth slides

Falling stock markets sent Canadian household net worth down by 4.4 per cent in the fourth quarter of last year, the biggest quarterly drop on records dating to 1990.

Statistics Canada said Monday that household net worth retreated for the second consecutive quarter, declining $252 billion from the third quarter.

On a per capita basis, household net worth fell from $179,300 in the second quarter of 2008 to $165,300 in the fourth quarter, a $14,000 decrease.

In comparison, U.S. household net worth tumbled nine per cent in the fourth quarter, the sixth consecutive quarterly decline.

Asset drop

The total value of Canadian household assets fell 3.2 per cent in the fourth quarter of 2008.

"The turmoil on equity markets significantly reduced the value of shareholdings as well as that of pension and life insurance assets of households," the federal government agency said, pointing out that the S&P/TSX fell 24 per cent in the fourth quarter.

The drop in assets was partially offset by increases in non-financial assets, specifically residential structures.

Statistics Canada said household assets in the United States have been dropping since the last three months of 2007, when the U.S. economy went into recession. U.S. total assets declined by 7.6 per cent in the fourth quarter of 2008

While Canadian assets fell, credit market debt of the Canadian household sector grew 1.7 per cent to hit $1.3 trillion at the end of the fourth quarter of 2008. That was a smaller increase than the 2.4 per cent jump in the previous quarter, as mortgage borrowing slowed in the fourth quarter.

In the last three months of 2008, Canadian households had 24.5 cents of debt for every dollar of assets.