A new poll commissioned by Re/Max suggests a majority of Canadians nearing retirement are thinking about selling their home so they can get access to the equity.
The poll conducted by Leger found that among those in the 55-64 age group, 56 per cent are considering selling their homes because they need the money for retirement.
The problem for many of those people, particularly in the Vancouver and Toronto markets, is that they don’t know where they are going to live once they sell.
“The competition in both Vancouver and Toronto among buyers has discouraged sellers from listing their properties, thus further reducing inventory. While sellers know their homes would be quick to sell, many are reluctant to become buyers themselves and enter the highly competitive market,” said Re/Max, in a release.
Homeowners also believe the market will continue to see prices rise, but Re/Max said some Canadians will not be able to “wait out the housing market” and will be forced to sell their home to fund their retirement.
Like others, the real estate company pointed to Vancouver and Toronto as the strongest markets in the country for price appreciation. Greater Vancouver prices were up 24 per cent in the first quarter from a year ago, with the average single family home in the city of Vancouver selling for more than $2 million. In the Greater Toronto Area the average home sold for $675,492, up 14 per cent from a year ago. Prices in Barrie, Ont., north of Toronto, rose 14 per cent during the same period.
“The ripple effect on the housing markets outside of Toronto and Vancouver is quite significant when you look at the Canadian housing market overall,” said Elton Ash, regional executive vice-president of Re/Max of Western Canada. “As a result, when you remove Toronto and Vancouver from the equation, the national average house price still rose approximately 10 per cent in the last year.”
Re/Max said falling oil prices have impacted cities like Calgary, Edmonton and St. John’s but maintains the impact has been limited by economic diversification in those cities and some major capital infrastructure projects.
But other centres are also benefitting from a slump in oil prices, as some workers head back to their original provinces after previously leaving to work in the oilpatch.
“Regions that for years have seen many of their young working population look to Alberta for employment have started to see that trend reverse. In Atlantic Canada, young people from outside the urban centres who would have moved west several years ago are now going to cities such as Halifax, which is having a positive effect on those economies,” said the real estate company, adding that the trend is notable in Southern Ontario, which has seen a boost in manufacturing jobs.
Re/Max noted that Windsor, Ont., once had one of the highest employment rates in the country, but is now below the national average.
Immigration is also expected to boost the housing markets as 300,000 new permanent residents settle in Canada this year, the highest number since 1913, leading to population growth which should soak up inventory already built.
Millennials are also expected to continue to be a source of support for the housing market but suggests they will need the help of parents who have already financially cashed in on their housing. Re/Max says 37 per cent of Canadians 18-34 who are considering buying a home expect help with their down payment from a family member, co-buyer or friend. Of those who are expecting help, 60 per cent anticipate it will come from their parents.