Typical home value increased $175,000 in five years
August 26, 2021
The 75 per cent of Canadian homeowners who have owned their home for more than five years have amassed more than $175,000 of equity on average, according to a report from RateSpy.com.
Many, including those most able to spend their equity, have accumulated far more thanks to incessantly rising home values—especially in B.C. and Ontario.
“Canadians have never had this much equity in their homes,” said Ben Rabidoux from national research firm Edge Realty Analytics.
Using Mortgage Professionals Canada data as a guide, for every $1,000 in value increase on a principal residence, it is estimated that average equity has risen by approximately $736.
Over nine million out of 10 million homeowner households now have more than 25 per cent equity. Despite high mortgage debt, now estimated at approximately $4.7 trillion in Canada, this equity cushion is a “very good thing for household financial stability overall,” according to Rabidoux.
Canada’s home equity windfall is having meaningful wealth effects. Edge Realty Analytics estimates that equity take-outs could potentially break $100 billion for the first time ever in 2021—compared to $74.5 billion in 2020 and $89.0 billion during the 2017 housing peak.