Monday, May 25th21.4°C
26383
25998

Millennials are richer than their parents were at that age, suggests BMO report

TORONTO - Many millennials may not be living in their parents' basements after all.

A new report by BMO Economics suggests that young Canadians, specifically those between 25 and 34 years old, are on average richer than their parents were at that age.

Using Statistics Canada data and other metrics, the study found that millennials today have more money than the generation preceding them at the same age.

Millennials had a median income of $34,700 in 2011, compared with $33,900 (when adjusted for inflation) among those in the same age bracket 30 years ago, says the report.

"This means millennials can buy about two per cent more goods and services than their parents could in the mid-1980s," writes BMO senior economist Sal Guatieri. "That doesn't sound like much, but the difference adds up over time."

The report suggests young families are also wealthier than their parents were. It said the median net worth of households headed by someone aged 25 to 34 years was $52,000 in 2012, almost double the inflation-adjusted median net worth of $28,752 of a comparable household in 1984.

However, although they may be richer, millennials also have more debt than their parents at the same age.

BMO says 84.4 per cent of households headed by young people owe some form of debt, compared with 82 per cent of the same households in 1984. The number of millennials who have a mortgage, at 85.6 per cent, is also higher than those in the same age group, at 79.2 per cent, in 1984.

"Though saddled with more debt and costlier homes, young people tend to be wealthier, have a little more spending power and enjoy better job opportunities than three decades ago," wrote Guatieri.

The report noted that one area that has worsened in the last 30 years has been the rising cost of housing, which has been attributed to bigger mortgages and more debt.

"Although earning slightly more than their parents did in the 1980s, millennials need to pay more to get their foot in the housing door," he said, adding that the average house price in 2011 was ten times the median salary of a young family. In 1984, this ratio was only about five times.

"While many baby boomers prospered financially in the past thirty years, one could say that their children are starting new careers and families on an equal, if not firmer, footing in most regions," concluded Guatieri.

A number of reports have suggested that the wealth of millennials has been negatively impacted by a variety of factors, including higher rates of unemployment and higher tuition rates.

Follow @LindaNguyenTO on Twitter.

Note to readers: This is a corrected story. An earlier version incorrectly said net median incomes for the head of a household aged 25 to 34 years old was $52,900 in 2012. It should have said median 'net worth'

The Canadian Press


Read more Business News

24910


Recent Trending




Today's Market
S&P TSX15187.40-13.36
S&P CDNX700.09-3.39
DJIA18232.02-53.72
Nasdaq5089.36-1.43
S&P 5002126.06-4.76
CDN Dollar0.8120-0.0001
Gold1204.30+1.30
Oil60.67-0.74
Lumber273.80+3.70
Natural Gas2.887-0.064

 
Okanagan Companies
Pacific Safety0.14+0.01
Knighthawk0.010.00
QHR Technologies Inc1.49+0.01
Cantex0.03-0.01
Anavex Life Sciences0.425+0.053
Metalex Ventures0.08-0.01
Russel Metals25.83+0.04
Copper Mountain Mining1.33-0.05
Colorado Resources0.105+0.005
ReliaBrand Inc0.0048-0.0049
Sunrise Resources Ltd0.04+0.01
Mission Ready Services0.17-0.00
Decisive Dividend Corporation2.20+0.60

 



26416

FEATURED Property
1940908#48-625 Boynton Place kelowna
3 bedrooms 3 baths
$479,900
more details
image2image2image2
Click here to feature your property
Please wait... loading


Cash stressed seniors

Photo: Thinkstock.comFor many Canadian homeowners, their house represents the biggest portion of their net worth. Now, increasing numbers of seniors are starting to recognize the hidden value of their...


Do or do not

Photo: Thinkstock.com“The optimist sees the rose and not its thorns; the pessimist stares at the thorns, oblivious of the rose.” - Kahlil Gibran Good planning is all about managing chan...


Penetrate the smokescreen

Photo: ContributedHas this ever happened to you? You’re in the middle of your second or third “good discussion” with a prospect. Everything’s going great. The prospect seems en...

_



26363

26418


Member of BC Press Council


25895