Canadians under 35 have a new worry, RBC says

In a Nov. 26 analysis, RBC economist Rachel Battaglia said households under age 35 have accumulated wealth at a much faster pace than any other age group since 2020, driven largely by financial assets and real estate gains.

But she noted a sharp disconnect between those wealth gains and income growth, which has been the weakest among all cohorts.

Battaglia said under-35 households nearly doubled their net wealth over four years, aided by pandemic-era government transfers like CERB, rising equity markets and, in some cases, generational transfers. Many also benefited from buying or refinancing homes during the period of ultra-low rates in 2020–21, which lowered borrowing costs and helped reduce liabilities.

She added that declining mortgage exposure among young households is partly the result of affordability pressures suppressing first-time buying activity. Postponing home purchases limits new debt while allowing existing owners to retain pandemic-era price appreciation. In Ontario, the average first-time buyer age rose from 38 to 40 between 2019 and 2024.

The income side of the ledger looks markedly different. Battaglia said disposable income for younger households has risen just 18% since Q1 2020 -the slowest growth of any age group, and the only cohort where income gains failed to keep pace with inflation. She pointed to labour market challenges as the key driver, including slower compensation growth, higher volatility in sectors where younger workers are concentrated, and longer job-search durations.

The under-35 employment rate is projected to fall three percentage points this year relative to 2020, reflecting a shrinking share of young Canadians earning employment income.

Battaglia said the gap between rising wealth and sluggish income raises questions about the durability of recent gains as asset markets normalize and the effects of pandemic transfers fade. Wealth accumulation for younger households has already slowed more than for any other age group in recent quarters.

She said a gradually improving labour market could help stabilize the trend, but emphasized the need to monitor earnings outcomes closely for signs of continued weakness.

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