Canada had 1 city where people were worth over $1M last year. There are 4 now

A view across housing to the skyline in downtown Victoria, British Columbia from the park on top of Mt. Tolmie. The large white building at top, right is the Save On Foods Memorial Arena. Don Denton/CP

Just a year ago, Vancouver was lonely at the top.

Back then, the West Coast city was the only one across the Great White North where people had average household net worth of over $1 million, according to Environics Analytics.

But that’s changed, according to a report released Tuesday. Three more cities have joined Canada’s “Millionaires’ Club” for cities, and two of them can largely thank real estate for the gains.

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The revelation is contained in Wealthscapes 2017, an annual report in which Environics Analytics gives retailers, financial institutions and charities a look at the “fiscal profile” of current clients and potential ones.

The firm arrived at its conclusions by using data from various sources, including Statistics Canada, the Bank of Canada, Equifax and the Teranet-National Bank Regional and Property Type Sub-Indices.

At $1,721,630, Vancouver maintained the highest average household net worth of all metropolitan areas, but it was joined in the $1-million club by Toronto ($1,154,107), Victoria ($1,055,468) and Calgary ($1,039,607).

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Vancouver’s net worth jumped by 19.4 per cent over the previous year, while Toronto’s grew by 17 per cent, Victoria’s by 15.4 per cent and Calgary’s by nine per cent.

Those trends came amid a noticeable increase in real estate values in all those cities except for Calgary, though the gains varied in each one.

Average real estate holdings in Vancouver appreciated in value by 21.8 per cent to $932,056, while in Toronto they grew by 19.7 per cent to $839,223, and in Victoria by 19 per cent, to $669,814.

The full moon rises over the Toronto skyline in Toronto on Nov. 14, 2016. THE CANADIAN PRESS/Mark Blinch

Environics Analytics said the growth in real estate values indicated “likely housing bubbles” in all three cities, and that the growth would seem “difficult to sustain.”

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And while both B.C. and Ontario have taken measures to cool a run-up in home prices, it’s “unclear whether they’ll give up some of their 2016 gains in 2017,” Peter Miron, vice-president of demographic and economic data at Environics Analytics, said in a news release.

READ MORE: The Vancouver foreign homebuyer tax is one year old. Here’s what Canada can learn from it

The Teranet-National Bank House Price Index (HPI) for July 2017 showed that Vancouver home prices grew by 8.56 per cent year-over-year, while in Victoria they grew by 10.48 per cent and in Toronto by 27.96 per cent.

Home price growth was less pronounced in Calgary, where it jumped by 1.85 per cent year-over-year.

Vancouver, British Columbia, Canada
Vancouver, B.C. THE CANADIAN PRESS/Jonathan Hayward

But the increases in home value also came alongside an erosion in affordability in these cities.

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RBC’s most recent Housing Trends and Affordability Report showed that the cost of affording a home in the Toronto area jumped by 22.8 per cent year-over-year, while in Victoria it grew by 18.3 per cent and in the Vancouver area by 1.4 per cent.

The latter trends were likely driven by B.C.’s imposition of a 15 per cent foreign buyers’ tax — affordability in Vancouver has deteriorated less swiftly, but the measure also likely “transferred some of Vancouver’s heat” to Victoria, which has seen a “serious deterioration in affordability.”

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