SmartHomeOwners

OTTAWA: Statistics Canada says household net worth declined for the first time in a year in the second quarter, mainly due to lower stock market prices.

The government agency says Canadian's household net worth declined by $34 million to $5.9 trillion in the April-June period.

The Toronto Stock Exchange index declined almost 6.2 per cent during the period, the agency says.

The report comes as a separate survey from the Canadian Payroll Association found 59 per cent of employees say they are living from paycheque to paycheque.

About half say they are putting away less five per cent of their net pay into savings.

The reports highlights often expressed concerns by the Bank of Canada that Canadians are piling up too much debt through purchases of homes and other big ticket items, and that they could be stretched when real interest rates rise.

The Statistics Canada data shows key debt-to-income ratios fell from a record 148 per cent to 145.7 per cent in the second quarter, and that debt-service ratios fell to a four-year low of 7.2 per cent.

But the TD Bank says the welcome drop in these ratios was likely driven by temporary measures. Personal disposable income rose 15 per cent annualized in the second quarter due to a surge in tax refunds.

The income boost is expected have fallen out of the equation in the current third quarter, the bank says, sending both the debt-to-income and the debt-service ratio higher.