Canadian Household Balance Sheet (2025 Q2)

Household wealth continued to climb as financial assets rose and real estate held steady

• Canadian household net worth (the value of assets minus liabilities) rose by $257.7 billion, or 1.5% quarter-on-quarter (q/q), reaching $17.9 trillion in Q2 2025. This marks the seventh consecutive quarter of gains.
• Financial assets grew by 2.7% q/q, powered by strong equity market performance in the U.S. and Canada, pushing the total to a fresh record high of $11.2 trillion. 
• Residential real estate values were flat, interrupting a two-quarter streak of gains despite modest improvement in monthly home prices. 
• Household financial liabilities grew at 1.5% q/q, with mortgage debt outpacing non-mortgage borrowings. 
• The household debt-to-income ratio climbed from 173.7% to 174.9%, as debt growth outstripped income. This marked the third consecutive quarter increase.
• The debt service ratio (total household debt payments as a percentage of disposable income) was effectively unchanged at 14.4%.

Key Implications

• Canadian household wealth has now advanced for seven straight quarters, with financial assets the key driver. Momentum looks set to continue into Q3 given record-high North American equity markets and a stabilizing housing backdrop.
• Stronger balance sheets have underpinned the surge in real consumer spending in the first half of the year, with inflation-adjusted wealth up more than 5% year-on-year. However, the wealth effect is likely to fade as the year progresses. Disposable incomes are under pressure from a cooling labour market and still-elevated inflation. Households are expected to keep spending in check, offering only modest support to growth in the second half of 2025.

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