Household net worth declined at a much slower rate in the first quarter of 2009 as the turmoil in financial markets eased, Statistics Canada said Monday.

Household net worth by $72 billion, or 1.3%, during the quarter. That contrasted with cumulative losses totalled the totaled $438 billion in the last two quarters of 2008, StatsCan said.

The value of both financial and non-financial assets of the household sector decreased during the quarter, as a result of ongoing losses in the stock market and lower real estate values.

Household net worth fell 1.3% in Canada compared with a 2.6% decline in the United States.

Growth in credit market debt (consumer credit, mortgages, and loans) of the household sector slowed to less than 1% during the first quarter of 2009, as new mortgage borrowing slowed.

Total household liabilities relative to net worth edged up modestly in the first quarter, increasing to 24.9¢ of debt for every dollar of net worth, from 24.4¢ in the fourth quarter of 2008.

The wealth shock has been smaller in Canada than in the U.S., StatsCan said. As a percentage of personal disposable income, household net worth has fallen faster in the U.S. than in Canada since the third quarter of 2007.

Canadian equity markets, as measured by the S&P/TSX composite index, fell 3% in the first quarter of 2009, following a drop of 24% in the previous quarter. The drop contributed to a continuing decline in the value of household equity holdings, StatsCan said.

IE