Date Posted: Aug 20, 2024
2024 Household Balance Sheet Update and Rebased Forecast
A year has passed since the publication of our 2023 Household Balance Sheet Report. As is our tradition, in the years in which no new edition of the report is published (such as this year), we issue an update and rebased forecast. This rebased set incorporates the additional year of data (year-end 2023) and the resulting forecast recalculation for the nine years remaining in our baseline forecast presented in our 2023 study.
As monetary policy expectations changed during the year, triggering significant asset reallocations, our original forecast presented in the 2023 Household Balance Sheet Report assumed that total assets would invariably revert to historical means within the forecast period. The shift to fixed term deposits in 2022 and 2023 overshoot our forecast, but an adjustment is underway as market valuations rebound and interest rates decline from current levels.
The strong growth in financial assets over 2023 was almost exclusively due to market effect, as household savings volumes were severely impacted by inflation and the higher cost of servicing debt. The prevailing sentiment at ISS Market Intelligence Canada (Investor Economics) is that any outstanding volatility, up or down, is a short-term phenomenon.
In November 2024 all slides containing segmentation data have been updated to include a restatement in the number of mass-market households (assets $0-$50k).
As monetary policy expectations changed during the year, triggering significant asset reallocations, our original forecast presented in the 2023 Household Balance Sheet Report assumed that total assets would invariably revert to historical means within the forecast period. The shift to fixed term deposits in 2022 and 2023 overshoot our forecast, but an adjustment is underway as market valuations rebound and interest rates decline from current levels.
The strong growth in financial assets over 2023 was almost exclusively due to market effect, as household savings volumes were severely impacted by inflation and the higher cost of servicing debt. The prevailing sentiment at ISS Market Intelligence Canada (Investor Economics) is that any outstanding volatility, up or down, is a short-term phenomenon.
In November 2024 all slides containing segmentation data have been updated to include a restatement in the number of mass-market households (assets $0-$50k).
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