Canadian Household Balance Sheet (2025 Q1)

Household wealth rises for the sixth consecutive quarter

• Canadian household net worth (the value of assets minus liabilities) increased by $141.2 billion or 0.8% quarter-over-quarter (q/q) to $17.6 trillion in Q1 2025. This marks the sixth consecutive quarter of growth.
• Financial assets rose 0.9% q/q, despite weaker equity markets. 
• Residential real estate values rose by 0.5% q/q for the second consecutive quarter, despite weaker monthly home price data earlier in the year.
• Household credit market debt increased by 1.1% q/q, adding $33.4 billion. However, growth in both mortgage and non-mortgage debt slowed relative to the previous quarter.
• The household debt-to-income ratio rose for the second straight quarter to 173.9%, as income growth fell short of rising debt. However, this measure of the overall debt burden of Canadians is down from its peak of 186% in 2021. 
• The debt service ratio (total household debt payments as a percentage of disposable income) remained flat at 14.4% last quarter. This is also off its peak of 15.1% in Q4 2023.

Key Implications

• As expected, the momentum behind last year’s net worth gains has faded, and 2025 has started on a softer note. Still, we haven’t seen an outright decline in financial assets despite trade-related anxiety already visible in the early 2025.
• Looking ahead, the picture is mixed. On the one hand, equity markets recovered by the end of the quarter following an early dip, with both U.S. and Canadian indexes tracking higher. However, when measured in Canadian dollars, these gains could still translate into losses if the greenback continues to retreat from its historic highs. Either way, we don’t expect wealth-related tailwinds to boost consumption. In this environment, caution remains the default strategy - as long as tariffs are the name of the game.

Disclaimer

This report is provided by TD Economics. It is for informational and educational purposes only as of the date of writing, and may not be appropriate for other purposes. The views and opinions expressed may change at any time based on market or other conditions and may not come to pass. This material is not intended to be relied upon as investment advice or recommendations, does not constitute a solicitation to buy or sell securities and should not be considered specific legal, investment or tax advice. The report does not provide material information about the business and affairs of TD Bank Group and the members of TD Economics are not spokespersons for TD Bank Group with respect to its business and affairs. The information contained in this report has been drawn from sources believed to be reliable, but is not guaranteed to be accurate or complete. This report contains economic analysis and views, including about future economic and financial markets performance. These are based on certain assumptions and other factors, and are subject to inherent risks and uncertainties. The actual outcome may be materially different. The Toronto-Dominion Bank and its affiliates and related entities that comprise the TD Bank Group are not liable for any errors or omissions in the information, analysis or views contained in this report, or for any loss or damage suffered.