Canada’s rich are getting richer, RBC says

Canadian household balance sheets remained resilient in the second quarter of 2025, with net worth edging higher despite elevated debt-servicing costs, weaker housing markets and trade-related uncertainty, according to a new report from RBC Economics economist Abbey Xu.

“The bottom line is that household net worth continues to hover near record highs, with growth edging higher, even as the debt-servicing ratio ticks upward,” Xu said. She cautioned, however, that wealth gains were concentrated among higher-income households, with Statistics Canada data showing the top 20% of the wealth distribution control nearly 70% of financial assets.

Most of the quarterly net worth gains stemmed from stronger equity markets, with the S&P/TSX Composite rising 7.8% after a weak first quarter. By contrast, housing weighed on net worth as real estate values declined and borrowing levels increased. RBC expects housing activity to recover gradually into late 2025 and strengthen further into 2026.

The household debt-servicing ratio held steady at 14.4% in the quarter, below the 15.1% peak reached in 2023, and has remained roughly stable for three consecutive quarters. RBC anticipates the ratio will move higher as fixed-rate mortgages set at pandemic lows continue to renew at elevated rates, though Xu stressed that the increases should remain manageable as long as the unemployment rate does not rise significantly further.

Household credit market debt climbed 1% in Q2 to $3.1-trillion. With disposable income growth of just 0.3%, the debt-to-income ratio rose to 174.9% from 173.7% in the prior quarter, underscoring how debt growth continues to outpace income gains.

Overall household net worth expanded by 1.5% to reach $17.9-trillion. That growth was driven almost entirely by financial assets, which rose in line with the equity market. Non-financial asset values moved lower as the CREA MLS Home Price Index fell 1.2%, reversing the increase recorded in Q1.

Meanwhile, the household savings rate slipped to 5% in Q2 from 5.2%, reflecting softer labour market conditions and resilient consumer spending.

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