Decomposition of changes in debt and assets across family characteristics
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What were the driving factors behind the differing increases in debt and assets for various groups? One way to answer this question is to examine the portion of the asset and debt increase that is related to housing—mortgage (debt) and real estate (assets). The decompositions are based on changes in average values for each family category.
Between 1999 and 2012, average debt rose by $57,600, while average assets rose by $300,700 (Table A.1). Because average values can be influenced by extreme values at the top of the distribution, changes in the average are typically larger than changes in the median.
| Change in average debt | Change in average assets | ||||||
|---|---|---|---|---|---|---|---|
| Total (in dollars) | percentage due to | Total (in dollars) | percentage due to | ||||
| Mortgage | Consumer | Real estate | Pension | Other | |||
| All | 57,600 | 76.7 | 23.4 | 300,700 | 53.0 | 24.8 | 22.2 |
| Age of major income earner | |||||||
| 15 to 34 | 51,400 | 84.8 | 15.4 | 123,400 | 67.1 | 14.4 | 18.5 |
| 35 to 44 | 106,400 | 85.2 | 14.7 | 263,700 | 76.3 | 15.5 | 8.3 |
| 45 to 54 | 54,900 | 74.5 | 25.3 | 322,000 | 54.6 | 27.0 | 18.5 |
| 55 to 64 | 47,300 | 62.2 | 37.8 | 344,500 | 42.1 | 28.3 | 29.6 |
| 65 and above | 29,900 | 46.8 | 53.2 | 360,900 | 47.5 | 17.9 | 34.6 |
| Education of major income earner | |||||||
| Less than high school | 23,500 | 48.5 | 51.5 | 132,500 | 60.4 | 18.9 | 20.8 |
| High school | 39,700 | 69.8 | 30.2 | 254,800 | 49.1 | 25.8 | 25.1 |
| College/trades | 55,700 | 77.6 | 22.4 | 269,900 | 52.0 | 26.3 | 21.7 |
| University degree | 78,000 | 81.8 | 18.2 | 396,400 | 56.9 | 24.9 | 18.1 |
| Family structure | |||||||
| Non-seniors (under age 65) | |||||||
| Singles | 37,900 | 84.2 | 15.8 | 136,200 | 62.9 | 26.4 | 10.6 |
| Couples without children or with children 18 and over | 60,900 | 72.6 | 27.6 | 403,900 | 41.7 | 27.7 | 30.7 |
| Couples with children under 18 | 107,100 | 81.8 | 18.2 | 354,500 | 66.5 | 18.9 | 14.6 |
| Lone parents | 41,000 | 81.2 | 18.8 | 152,200 | 61.0 | 32.0 | 7.0 |
| Others | 41,900 | 76.8 | 23.2 | 221,800 | 62.4 | 23.3 | 14.3 |
| Seniors (65 and over) | 29,900 | 46.8 | 53.2 | 360,900 | 47.5 | 17.9 | 34.6 |
| Immigrant status of major income earner | |||||||
| Immigrated within the last 10 years | 68,300 | 93.7 | 6.3 | 233,400 | 88.4 | 3.1 | 8.5 |
| More than 10 years since immigration | 71,000 | 71.8 | 28.2 | 304,900 | 64.3 | 15.9 | 19.9 |
| Canadian-born | 53,600 | 75.9 | 24.1 | 303,100 | 48.4 | 27.9 | 23.6 |
| Region | |||||||
| Atlantic | 40,700 | 76.9 | 23.1 | 191,100 | 42.5 | 40.6 | 17.0 |
| Quebec | 42,500 | 71.1 | 28.7 | 281,900 | 40.0 | 27.0 | 33.0 |
| Ontario | 52,800 | 77.7 | 22.3 | 285,100 | 55.4 | 26.0 | 18.5 |
| Manitoba and Saskatchewan | 55,200 | 81.3 | 19.0 | 314,800 | 42.6 | 32.9 | 24.5 |
| Alberta | 92,600 | 74.5 | 25.5 | 309,100 | 68.8 | 18.3 | 12.9 |
| British Columbia | 80,000 | 79.9 | 20.0 | 424,400 | 61.4 | 17.4 | 21.2 |
| Homeownership status | |||||||
| Owner with a mortgage | 97,800 | 85.9 | 14.0 | 327,200 | 64.4 | 22.2 | 13.4 |
| Owner without a mortgage | 38,300 | 30.5 | 70.0 | 546,483 | 42.8 | 26.6 | 30.5 |
| Non-owners | 8,000 | 57.5 | 43.8 | 39,600 | 21.5 | 50.3 | 28.0 |
| Income quintile | |||||||
| Bottom quintile | 24,700 | 74.5 | 25.5 | 74,300 | 80.9 | 7.1 | 11.8 |
| Second quintile | 35,600 | 75.3 | 25.0 | 162,100 | 66.1 | 15.1 | 18.9 |
| Middle quintile | 57,700 | 72.8 | 27.4 | 263,200 | 56.8 | 17.4 | 25.8 |
| Fourth quintile | 70,100 | 80.2 | 19.8 | 338,100 | 52.9 | 30.1 | 17.0 |
| Top quintile | 100,200 | 77.2 | 22.8 | 667,400 | 45.1 | 29.3 | 25.5 |
| Source: Statistics Canada, Survey of Financial Security, 1999 to 2012. | |||||||
Of the total increase in average total debt, more than three-quarters was due to an increase in mortgage debt. The contribution of mortgage debt to the increase in total debt was higher for the younger age groups. For example, mortgage debt was responsible for 85% of the growth in total debt for those aged 15 to 44. In comparison, the contribution was 47% for those aged 65 and over. This is because many in the younger group were most likely first-time home buyers in the 2000s, a period that corresponded with rising housing prices.
There was not much variation across income quintiles in the proportion of the increase in mortgage-related debt. For all quintiles, the contribution of mortgage debt to the increase in average debt varied between 73% and 80%. Regionally, the contribution of mortgage debt to the overall debt increase varied from 71% in Quebec to 81% in Manitoba and Saskatchewan.
Other groups in which mortgage debt played a larger role in the overall debt increase included recent immigrants (94%), singles (84%), couples with children (82%) and those with a university degree (82%).
With regard to assets, real estate contributed to more than one-half of the overall increase in the average value. The value of employer pension plans contributed an additional 25%. The remainder of the increase was due to all other assets (financial investments such as RRSPs, and other non-housing items like cars). Real estate contributed to more than three-fourths of the increase in the value of assets among those aged 35 to 44 and 67% among those aged 15 to 34. The contribution of real estate was lower for older age groups.
Differences across income quintiles were larger for assets. Specifically, real estate contributed more to the increase in overall assets among those in the bottom than among those at the top of the income distribution. Among those in the bottom quintile, average total assets increased by $74,300. More than four-fifths (81%) of that increase could be attributed to real estate. In comparison, average assets increased by $667,400 in the top quintile, and less than one-half (45%) of that increase was due to real estate.
Regionally, real estate contributed a larger proportion of the increase in the value of assets for those in Alberta (69%) and British Columbia (61%). The contribution of real estate was lowest in Quebec (40%).
Notably, real estate contributed to 88% of the increase in the value of assets of recent immigrants.
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