National Post (National Edition)
Report predicts huge increase in millionaires
Canadian number tipped to grow by 50%
TORONTO • The number of Canadian millionaires is expected to grow by 50 per cent over the next five years, according to the latest edition of the annual Credit Suisse Wealth Report.
Credit Suisse said Canada currently has 1,117,000 adults with asset holdings exceeding US$1 million, an increase of 25,000 individuals from last year. Based on forecasts in the growth of Canada’s gross domestic product and equity market capitalization, Credit Suisse expects the number of adult Canadians whose wealth exceeds US$1 million will rise by 50 per cent to 1,680,000 in 2021.
Canada is a rich country by global standards. According to Credit Suisse, Canada has about four per cent of the richest one per cent, even though Canada makes up only 0.6 per cent of the world’s adult population.
Credit Suisse said wealth per adult in Canada lags the U.S. by about 22 per cent. The average Canadian adult has about US$270,000 in assets, while the average American holds US$344,000.
Yet Canada’s wealth is better distributed, with Canada’s median wealth per adult, US$96,700, more than double that in the U.S., where it’s US45,000. Canada also has a smaller percentage of adults whose wealth is beneath US$10,000 and a larger percentage of adults with more than US$100,000.
Credit Suisse says wealth per adult in Canada has grown an average of 5.9 per cent a year since 2000 when measured in U.S. currency, or 4.9 per cent a year when measured in loonies.
The Canadian economy is heavily weighted to resources and has suffered from the dip in prices for oil and other commodities. Yet Credit Suisse says Canadian wealth has still managed to rise because low interest rates continue to fuel housing prices in major urban cities.
Globally, Credit Suisse says aggregate wealth increased by US$3.5 trillion or 1.7 per cent to US$255.7 trillion.
The bank said the increase merely kept pace with global population growth, and wealth per adult of US$52,819 was unchanged for the first time since 2008.
The United Kingdom posted a notable slide in wealth in the aftermath of the June Brexit vote. Wealth per adult decreased US$30,000 to US$289,000.
The Brexit fallout also left Britain with 406,000 fewer millionaires, with that number dropping to 2,225,000 in 2016 from 2,631,000 last year.
“The United Kingdom had a tumultuous end to 20152016, with sharp declines in the exchange rate and the stock market following the vote to leave the EU in the June 23 referendum,” the report states.
“The stock market recovered later, but the outlook is very uncertain, both for the economy and household wealth.”
Still, Credit Suisse forecasts that the number of millionaires in the U.K. will grow 40 per cent to 3,124,000 by 2021, up from 2,225,000 this year.
China is the fastest-growing countries for wealth. Credit Suisse says the number of millionaires there should increase by 73 per cent to 2,749,000 in 2021, up from 1,590,00 this year.