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Vancouver is Canada’s first ‘city of millionaires’: analysis

Vancouver skyline at sunrise is shown in a handout photo. (The Canadian Press / Destination BC)

Fueled by its red-hot real estate market, Vancouver has become Canada’s first “city of millionaires," according to a new analysis.

The WealthScapes report, created by marketing and research firm Environics Analytics and published in the Globe and Mail, found that in 2015 the average household net worth in the city was $1,036,202, up 7.1 per cent from the previous year.

Vancouverites appear to be benefiting from their real estate holdings – which includes appreciation on the homes they already own as well as new acquisitions – as they have jumped by 11.9 per cent, nearly three times the national average of 4.6 per cent.

On average, the total of liquid assets per household in Vancouver also dropped.

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Peter Miron, one of the authors of the analysis, told the Globe that indicates that some people are putting their savings towards down payments on properties.

He added that the city is a “big worry” as it’s “basically only real estate that’s fueling growth.”

The analysis comes on the tails of recent figures from the Real Estate Board of Greater Vancouver that show home sales fell in the region by 26 per cent in August compared to the same month last year.

A headline-grabbing tax aimed to cool the red-hot housing market by requiring foreign buyers to fork over an additional 15 per cent of a home’s value in property transfer taxes was passed by the provincial government in late July.

On a provincial level, households in British Columbia also boasted the highest levels of wealth, with their net worth jumping by 6.3 per cent to $883,049.

That’s more than $200,000 higher than the average Canadian household, who possess on average $680,098, up 4.3 per cent from the previous year.

Ontario came in second behind British Columbia, with the average household net worth increasing by 5.2 per cent to $793,338.

The growth was buoyed by pensions, above-average real estate growth and liquid assets.

However, not the analysis did not paint a rosy picture in Canada’s oil-producing provinces.

Third-placed Alberta, which dropped from the second spot last year, saw household net worth decline by 0.7 per cent to $763,812.

The province’s decline was attributed to a two per cent drop in real estate values, slightly-below average growth in pensions and liquid assets.

Fellow oil-producing provinces, Newfoundland and Labrador and Saskatchewan, also saw weak growth in household net worth by 1.8 and 1.1 per cent respectively.

Miron said that the provinces might not be facing a recession, but are “definitely struggling.”

“Canada is really a tale of two economies at the moment,” said Miron.

“We saw the oil-based provinces, especially metro centres, really taking a beating relative to the rest of Canada. These provinces are facing significant headwinds.”