A global rally in bonds and equities supported Canadians' wealth at the end of last year, offsetting continued declines in real estate values.

Canadians' household net worth rose 1.8 per cent to $16.42 trillion in the fourth quarter, Statistics Canada said Wednesday. The increase was driven by a five per cent increase on the quarter in the value of household financial assets, the biggest increase since 2010, outside the pandemic.

Household debt rose 3.4 per cent in 2023, the slowest pace of accumulation since 1990, as higher interest rates weighed on housing activity and limited mortgage growth. The debt to income ratio fell to 178.7 per cent at the end of last year, the lowest level since the second quarter of 2021.

The data point to the financial resilience of Canadian households, which have continued to grow their wealth despite one of the most aggressive hiking cycles in the history of the central bank. Household incomes rose 1.3 per cent on the quarter, the agency said.

The household debt service ratio, which tracks the total payments of principal and interest Canadians make as a proportion of their disposable income, was 15 per cent in the fourth quarter, little changed from the previous month, but still the highest level in the history of the data.

Economists surveyed by Bloomberg expect the Bank of Canada will start lowering borrowing costs in June. Traders in overnight swaps see July as the most likely timing.