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Retirement ain’t what it used to be


 
by Neil Sharma 20 Jun 2018 MBN

Dregs of the Great Recession are still being felt.

A growing number of Canadians are retiring with mortgages because of the hardships they endured during the economic crisis a decade ago.

“They had RRSPs or other investments, and they [had] all that potential compounding interest, so if they had invested $100,000 and still had that principal $100,000 after the crash, they were considered lucky,” said Huong Luu, a real estate coach, consultant and independent mortgage agent.

“From a real estate investment point of view, a lot of individuals who purchased on appreciation lost their shirt from the economic crash. A lot of them purchased preconstruction, new development, new properties all under the assumption that appreciation would be there. They overleveraged themselves financially and when the crash came they couldn’t make their payments, so they declared bankruptcy or sold their properties at half the price, or walked away altogether.”

In addition Great Recession aftershocks, another reason Luu says a quarter of Canadians are carrying mortgages into retirement is because their adult children need a leg up.

“A lot of retirees don’t feel like they can retire. They took a big hit and work past age of retirement because of it,” she said. “What you’re seeing now is an increase in retirees who will refinance under a CHIP Reverse Mortgage. It’s not just the economy faltering that created this 25%; a lot of these retirees feel an obligation to help their children, so they pull money out of their equity and increase debt load on their property to help. Then they help their children buy their property, or do some investments with their children.”

Broker Corinna Smith-Gatcke of The Mortgage Advisors in Brockville indicated that retirement isn’t quite as arduous in her neck of the woods—only 10.2% of households with persons 65 years old and over are carrying mortgages—but concedes retirement isn’t what it used to be.

“It’s just a sign of the times,” Gatcke-Smith said of retiring in debt. “People are extended, so they’re working longer and later in life to service their debt.

“In a larger centre, I think it’s almost unavoidable. In places like the GTA and Vancouver, how do you save enough for a down payment when housing is going for over a million dollars? It changes the landscape for first-time buyers, but in my market you can still buy a house for under $200,000 and parents can give a $7,500 down payment without breaking the bank.”
 
Related stories:  Government declines B-20 subcommittee to avoid embarrassment, claims industry vet

Is Canada’s household debt spree winding down?


 
by Ephraim Vecina 18 Jun 2018 MBN

With latest numbers from Statistics Canada showing that the national debt-to-disposable-income ratio has declined by the greatest amount on record in Q1, analysts argued that this marks the beginning of Canadian households’ decreased dependence on debt.

The ratio went down to 168% in the first quarter of 2018, from 169.7% in the previous quarter. The 1.7% decline was the largest in record dating back to 1990. Disposable income grew by 1.3%, and credit-market debt increased by a miniscule 0.3%. Mortgage borrowing declined by $2 billion (down to $13.7 billion) quarter-over-quarter.

Statistics Canada also noted that Canada’s latest housing price index stood flat in April, with Toronto exhibiting its first annual decline since 2009.

“[This slack] will give the Bank of Canada breathing room to maintain a gradual pace of tightening,” Toronto Dominion Bank senior Canada rates strategist Andrew Kelvin told Bloomberg.

Read more: Canadian households increasingly relying on debt to stay afloat – study

However, the Credit Counselling Society was unconvinced that a significant portion of the market is already weaning itself off debt, as many households (almost 47% of Canadians) are still living paycheck to paycheck.
25% of Canadians recently polled by the organization indicated a belief that they would not be able to shell out $2,000 within a month during an emergency.

“Canadians have not taken sufficient steps to address and improve their overall financial wellbeing” Credit Counselling Society president Scott Hannah said.

“With tariffs being placed on goods from both sides of the border, we are not only concerned about the ramifications for the industries and employees impacted by these tariffs, but for Canadians in general who will feel the pinch to their pocketbooks as a result of long-term consequences of a drawn-out trade war.”
 
Related stories:
CMHC Q1 report reveals arrears rate

Progressive Conservatives decry B-20, push for study to examine effects


 
by Neil Sharma 13 Jun 2018 MBN

The Progressive Conservatives’ Deputy Shadow Minister for Finance has proposed creating a subcommittee to study B-20’s impact in a bid to have it overturned.

According to MP Tom Kmiec, the Liberal Party acted callously by subjecting Canadians to the mortgage stress test.

“The new stress test is going to block up to 60,000 Canadians from being able to buy a home,” Kmiec told MortgageBrokerNews.ca. “About 100,000 Canadians will probably fail the stress test and won’t be approved to borrow from a federally-regulated lender and that will push them to the unregulated lenders. We know from a CIBC Capital Market report that 47% of all mortgages need to be refinanced in 2018. In the year they knew there would be so many people refinancing, they still imposed the stress test. That was irresponsible and unfair.”

This is the second time Kmiec has proposed studying the mortgage rules after the first motion was voted down, however, he’s willing to play hardball this time.

“I will not approve travel of the committee until such time as we approve a study on mortgages,” said Kmiec. “I’m being reasonable—I’m willing to make amendments to my motion, I want to be collaborative, and that’s why I’m suggesting we make a subcommittee. I think it’s very reasonable. A home, whether it’s a townhouse, a condo or a detached house, is the most important financial decision a Canadian will make, and likely the biggest financial asset they’ll ever purchase. Therefore, it’s totally reasonable to look at this and I’m going to keep pressing.”

Kmiec says that his constituency in Calgary Shepard is replete with homeowners unable to requalify and who are stuck with lenders pushing 100 basis point increases. None of their stories surprise him, though.

“It’s important for the committee to look at the stress test because a report of theirs from a few years ago said the government should help first-time homebuyers and not introduce one-size-fits-all policy.

“If the problem is with indebtedness of Canadians, why are they making it more difficult for them to keep the homes that they’re in, especially for high-ratio mortgages, which also face the stress test. Those people put down more than 20% on their homes, but now the government is making it more expensive for them to carry their mortgages. That’s not just unjust and unfair—that’s bad policy making.”

Mortgage Outlet’s Principal Broker Shawn Stillman doesn’t believe Kmiec will be successful in imploring the Liberals to study the mortgage rules simply because it’s Politics 101.

“It’s unlikely he’ll be successful because government doesn’t like giving any credence to the opposition,” said Stillman. “They could have the best answer but they’ll never say ‘You’re right.’  If they believed it was an issue, they’d say ‘no’ to his suggestion and bring up their own motion a few weeks later.”

Also unlikely, he added.

“I truly believe the Liberal government doesn’t believe it’s an issue. They don’t see any real downside, although I think the Liberal loss in Ontario definitely shows there’s a downside.”

Sharing your spouse’s debt might be unwise


 
How merging family debt in a second mortgage raises risks

by Scott Terrio Jun, 2018

Q: My husband and I still owe $44,000 in student debt between the two of us. We each have our own credit card, and I pay mine off in full every month while he owes $16,000 on his. We own our home together and have maybe $85,000 in equity today. My husband wants to use that equity to pay off our student loans and his credit card debt. I’m not sure that’s a good idea. Should we roll his credit card debt into a mortgage that we both co-signed? What impact does that have on my credit rating?

A: Consolidating your husband’s debt into a second mortgage is a risk. Many couples today bring their own personal debts to a union. Some of this is due to marriage-age people carrying more debt generally than they used to, and some is due to the fact there are more second marriages or blended families. It is fairly common that you are legally joint on a major asset — your home — despite the unequal personal debt between you. While consolidating your debt into a new loan can be a good way to save on interest charges, there are implications in rolling both of your non-joint debt into a second mortgage you each co-sign.

Today your husband’s debts are his alone. If he defaults on his payments, his creditors cannot pursue you for payment. But if you agree to consolidate his debts into a joint mortgage you are now liable personally for those debts. And that means 100% legal responsibility – not 50/50. This may not be a good solution if your second mortgage payments are still a stretch financially between the two of you.

If you were both to combine all your unsecured debt into a second mortgage, that would be a $60,000 loan for which you and your husband would be equally responsible as a result of co-signing. Assuming you can qualify for a second mortgage, which may not be feasible in today’s market, your interest rate on this loan will be higher than on your first mortgage because your lender will be assuming greater risk.

You would first want to ensure that you have the repayment capability for this new loan, on top of all your other fixed monthly payments. For a $60,000 second mortgage at an assumed rate of 5% interest, amortized over a 10-year period, it would likely cost you about $636 a month. Can you be certain that both you and your husband can afford this extra monthly payment? Recent polls have indicated that many Canadians could not afford an increase to their monthly expenses of far less than this amount.

Something we see often is an ‘event’ of some kind which pushes people over the edge financially, like a job loss or an unexpected illness. What if your husband is suddenly unable to contribute towards it? Again, you would be on the hook for the entirety of the mortgage payment.

Consolidating debt, whether student debt or credit card debt into a second mortgage also means putting an asset at risk, since your second mortgage would involve borrowing against your home. Are you willing to risk losing your home to deal with your husband’s credit card debt which appears to be the major financial problem?

As you are currently able to keep up with your debts, it may not make sense to risk your share of the home equity by collateralizing your manageable debts against your home. If you can also comfortably make payments on your student loan debt, I would suggest sticking to this plan until your student debt is paid off.

As an alternative, your husband may be able to deal with his personal debt through an affordable debt consolidation plan like a consumer proposal, rather than a second mortgage.

To be eligible to file a consumer proposal, a debtor must be insolvent. This means they either owe more than they own, or they cannot keep up with their debt payments as they come due. If your husband is struggling with excessive credit card and student debt, he may qualify.

In this case, however, your husband has a substantial asset that his creditors would expect to gain value from: his share of the equity in your home. The equity in his home is sufficient to cover all his debts in full. While it is possible to file an interest-free consumer proposal for 100% of your debts, whether this is financially feasible is too complicated to determine without a closer look at his budget.

Your husband’s situation is also complicated by his student debt. It’s important to note that student loan debt can only be discharged with a consumer proposal if you have been out of school for seven years or longer.  Student debt is a complicated area of insolvency law; however, there may be options to allow your husband to deal with all his credit card debt and some or all of his student debt through a proposal.

The one major advantage of a proposal for your husband is that he would obtain debt relief, without having to give up security in your home. In addition, if your husband does file a consumer proposal, while it would affect his credit report, it would not affect yours.

This is a complicated scenario and one that should not be solved quickly and without a full understanding of all the options. I recommend you first talk with your mortgage lender to see what a second mortgage may cost. Then book an appointment with a Licensed Insolvency Trustee so you can compare the options, and risks, of consolidating and assuming liability for your husbands debt, with requiring your husband to deal with his debts on his own.

Survey reveals top financial fears of seniors


 
One-in-four seniors fear they might run out of money before they die

By: Leah Golob, Investment Executive 2018

An alarming number of seniors are afraid as to whether they can afford long-term care and stretch their retirement savings, according to a national survey commissioned by the Financial Planning Standards Council (FPSC) and Credit Canada.

The Seniors and Money Report asked 1,000 Canadians over the age of 60 how they felt about debt, income, financial planning and work.

The survey revealed that nearly half of Canadians aged 60 and older say they have at least one financial concern.

For example, one-in-four seniors surveyed fear they might run out of money before they die, while an equal amount are concerned they won’t be able to pay for long-term care. Other fears include never being able to pay off their debt, not having enough money to retire, having to sell their house or needing to depend on children for financial support.

The report also discovered that Canadians are extending their working years. Specifically, one-in-five Canadians are still working past age 60, and 6% are working to age 80 and above.

The reasons for doing so include:

  • Three-in-ten can’t afford retirement (including 13% who say they’ll never afford retirement)
  • One-in-eight have too much debt
  • Approximately 28% don’t have enough savings
  • Twelve per cent are still helping their children financially
  • Nearly a third continue to work because they love their job

 
The report also demonstrates that fewer Canadians are able to reply on company pension plans. For example, 50% of Canadians 80 and older list a company pension plan as a source of income, while the percentage is 41% among those 60 to 69.

“Times are changing, and many seniors haven’t planned for or anticipated the life and financial circumstances they now are facing,” says FPSC’s consumer advocate Kelley Keehn, in a statement.

“Some seniors may feel embarrassed or that it’s too late to ask for assistance when it comes to their finances,” she adds. “Truthfully it’s never too late to get started.”

Additional findings from the study include:

  • Men are significantly more likely to be employed, have a company pension plan or have investments as their current source of income than women
  • Four-in-ten of those who have a company pension as a source of income also hold investments
  • Three-in-ten Canadians age 60 and older with children are supporting them financially (including 22% of those 80 and older)

 
Overall, Canadians aged 60-years and older are more likely to be supported by the government (73%) than any other form of income.

Canadian households increasingly relying on debt to stay afloat – study


 
by Ephraim Vecina 31 May 2018 MBN

A fresh study conducted by Ipsos for personal insolvency practice MNP LTD revealed the extent of Canadian households’ reliance on debt, with 58% of those with consumer debt stating that they would need an increase of at least 37% in their household incomes to live debt-free.

The problem is exacerbated among lower-income and insolvent households, which stated that they would need to make 49% more income.

Albertans in debt stated that they are more likely (69%) to need significant increases (21% or higher) in their household incomes in order to live without any consumer debt. Other provinces whose residents are raring for higher household incomes amid the debt-heavy climate are Atlantic Canada (62%), Saskatchewan and Manitoba (59%), Ontario (55%), Quebec (51%), and British Columbia (50%).

Read more: Higher rates putting greater pressure on indebted Canadians

“It used to be that people would save for big purchases and have some money tucked away for emergencies. Now Canadians look straight to HELOCs or credit cards or other forms of debt when it comes to paying for unexpected car repairs, home maintenance, and even basic household expenses,” MNP LTD president Grant Bazian said.

“When debt becomes a financial survival tool it makes people particularly vulnerable to exploitative and high-cost lending. They have to spend more to service their debts – particularly as interest rates rise – so they have less money to make ends meet. And so begins the vicious cycle of debt,” Bazian added.
 
Related stories: CMHC Q1 report reveals arrears rate

Looking for your best mortgage rate?


 

Here’s 20 questions to ask:

ROBERT MCLISTER – SPECIAL TO THE GLOBE AND MAIL

“What’s your best mortgage rate?” was once a fairly straightforward question. These days, it’s impossible to respond intelligently to it without asking a litany of other questions.

That’s true today more than ever thanks to recent federal rule changes. Ottawa’s changes to regulations have jacked up lenders’ costs – and the lowest mortgage rates – on refinancings, amortizations over 25 years, million-dollar properties, single-unit rental properties and mortgages where the loan-to-value ratio is between 65.1 and 80 per cent.

So be prepared to play a game of 20 questions to find your best rate in today’s market. Note that thanks to new mortgage rules, which make it more expensive to lend to people who the government deems higher risk, the last six questions on this list have taken on a whole new importance.

Here are those questions:

  • 1) What’s the term?
    Mortgage contract length (“term”) and rate type (fixed or variable) are usually the biggest factors impacting your rate.

    As of this writing, the cheapest five-year fixed rate, for example, costs 50 basis points (bps) more than the cheapest five-year variable rate. (Note: 100 basis points equals one percentage point, so 47 bps equals 0.47 percentage points.)

  •  

  • 2) Is the mortgage for your primary residence, a second home or a rental that you won’t live in?
    If you rent out the property and don’t live there, you’ll pay up to 25 bps more than if it were your primary residence.

    The cheapest rates are seldom available on second homes or unusual properties.

  •  

  • 3) Can you adequately prove your income?
    If you can’t, forget about the lowest rates. In most cases you’ll pay at least 150 bps more.
  •  

  • 4) Where is the property located?
    The province matters. The lowest one-year fixed rate in New Brunswick, Newfoundland, Prince Edward Island, Northwest Territories, Nunavut and Yukon is over 30 bps more than in Alberta, British Columbia and Ontario.

    The city matters, too. You’ll cough up at least 10 bps more than the lowest market rate (on the term you want) if your property is rural. The reason: if the borrower doesn’t pay, it’s harder for the lender to sell a rural property.

  •  

  • 5) When is the closing date?
    The longer you want your rate guaranteed, the more you’ll pay. A 90– or 120-day rate hold typically costs at least 10 bps more than a 30-day rate hold
  •  

  • 6) Can you live with prepayment restrictions?
    Some lenders now charge 10 bps above their lowest rates if you want to prepay an extra 5 to 10 per cent on your mortgage.

    One of the country’s lowest rates currently allows no prepayments at all.

  •  

  • 7) Can you live with portability headaches?
    If you move to a new home, certain deep discount lenders will force you to close your old property and new property on the same day (good luck with that). Otherwise you’ll pay a penalty.

    Remember that if you’re using the equity in a property you’re selling for the down payment on your new property, and that new property closes beforeyour old one, you’ll usually need extra cash or a bridge loan. Not all lenders offer bridge loans.

    You’ll often pay 5 to 15 bps more, compared to the lowest market rate, to have a full 90 days of porting flexibility and access to bridge loans.

  •  

  • 8) Can you live with refinance restrictions?
    If you want the freedom to refinance early with any lender, some lenders will charge you 10 bps more than their lowest rates for that privilege.

    If you want to cash out more than $200,000 in equity, you’ll often pay at least 15 bps more than the cheapest market rates.

  •  

  • 9) Can you live with a large penalty?
    More than three-quarters of the fixed mortgages sold in this country do not have, what I’d term, “fair” penalties. In other words, if you break the mortgage contract early, you’ll often pay through the nose (more on that).

    Some lenders offer both high– and low-penalty options, with the low-penalty mortgages costing 10 bps more. But even with that rate premium, you’d likely still pay less than if you broke a fixed mortgage with a high-penalty lender, like a major bank.

  •  

  • 10) What type of property is it?
    A few lenders charge 5 to 10 bps more for high-rise condos, depending on your equity and other factors.
  •  

  • 11) Do you want good rates when you renew and/or if you refinance early?
    Some lenders try to stick their renewing or refinancing customers with horrid “special offer” rates (they’re not so special, trust me).

    If you want a lender that’s highly competitive after you close, you’ll often pay at least 10 bps more than the cheapest market rate.

  •  

  • 12) Do you have any credit flaws like bankruptcy, consumer proposal or unpaid debts?
    If so, some lenders won’t even touch you. The ones who will, will charge 50 to over 200 bps more than the lowest rate in the market.
  •  

  • 13) Do you have a property address already or is it a pre-approval?
    You’ll almost never get the best rate on a pre-approval (more on that). Expect to pay at least 10 to 20 bps more than rock bottom rates if you haven’t purchased your property yet.
  •  

  • 14) How big is the mortgage, as a percentage of your home value?
    If you’re a well-qualified borrower, “loan-to-value” (LTV) is the second-most-important factor in determining the rate you’ll pay.

    If your LTV, for example, is 80 per cent instead of 65 per cent, you’ll often pay at least 15 bps more than the best market rates.

    Oddly enough, someone with an 80 per cent LTV will pay up to 20 bps more than if they had a 95 per cent LTV. Why? Because mortgages with less than 20 per cent equity cost lenders less, since borrowers must pay for their own default insurance.

  •  

  • 15) Can you pass the government’s “stress test”?
    If you’re getting an insured mortgage (which is usually required if you have less than 20 per cent equity), you must prove you can afford a payment at the Bank of Canada’s five-year “benchmark” rate. That rate is roughly two percentage points higher than your actual “contract rate.”

    If you can’t do that, but you have at least 20 per cent equity, some lenders will let you qualify on your “contract rate” instead, which is much easier, but you’ll pay at least 15 bps more.

  •  

  • 16) What is your credit score?
    If your credit score is less than 680, it could cost you a minimum of 10 bpsmore. A few lenders won’t deal with you at all, and others will limit their rate specials to borrowers with scores of 700 or 720.

    By regulation, a sub-680 credit score will also limit the amount of debt you can carry if you want a competitive rate.

  •  

  • 17) Are you purchasing, refinancing or merely switching lenders?
    A refinance today costs 15 to 50 bps more than the lowest market rate on a purchase.
  •  

  • 18) What is/was the property’s purchase price?
    Many lenders now charge 15 bps more if your property value is more than $1-million.
  •  

  • 19) Is your mortgage already insured?
    If it is, and you’re simply switching lenders with no changes to the mortgage, you’ll save at least 10 bps compared to average discounted rates.
  •  

  • 20) How long of an amortization do you require?
    Many lenders, including big banks, are now charging 10 bps extra for amortizations over 25 years.

 
The above list of questions is by no means exhaustive. And there are always exceptions. One is if you’re asking for a renewal rate from the lender who presently holds your mortgage. If you send them a copy of various competitor’s rates, you won’t need to answer all these questions to get their lowest rate.

Ottawa’s new mortgage rules have made factors such as healthy credit scores, purchase price and amortization lengths more important. The changed regulations have led some lenders to advertise as many as 10 different rates for a five-year fixed mortgage alone.

Today’s landscape requires lenders and mortgage brokers to factor in more criteria than ever before when setting rates. So if you see a red– hot bargain advertised on a lender or broker’s website, it’s bound to have caveats. Get ready to ask–and answer–plenty of questions.

Robert McLister is a mortgage planner at intelliMortgage and founder ofRateSpy.com.

Ottawa turning into GTA’s playground?


 
by Neil Sharma 25 May 2018 MBN

Ottawa’s housing market has caught fire, and the reason: An influx of buyers from outside of the region.

“Some of it is the ripple effect of higher priced markets like Toronto or B.C.,” said Dorothy Smith, a broker with Mortgage Brokers Ottawa. “We’re finding more people who can work remotely are purchasing here. They can work in Ottawa and still maintain a job in Toronto or other centres. Some of our buyers are migrating from those higher-priced areas to Ottawa to capitalize on the lower prices we have had, which are now increasing a little bit.”

To say that prices are increasing a little bit might be an understatement. The Canadian capital is replete with multiple offer situations, which Smith says have become inescapable in the last two to three months.

“Last year, we had a few situations where specific areas had higher selling prices, but now there are more and more multiple offer situations all over the immediate Ottawa area where prices are going up quite quickly,” said Smith. “For the most part, it’s people who have been used to the Toronto pricing or the B.C. pricing and are willing to buy at a higher price than what the lists are.”

The bidding wars are manifesting in the same way they did in Toronto’s single-family detached market before the Fair Housing Plan put a stop to them virtually overnight.  Sandra Tisiot, a mortgage agent with DLC Smart Debt, has a slew of preapproved clients who are unable to find homes.

“A lot of bidding wars are happening,” she said. “I’m sitting on a pile of preapprovals but they’re losing out on the homes every time they go and put an offer in.”

While both Smith and Tisiot say there’s an influx of buyers from outside the Ottawa region, the latter says they’re even coming from abroad.

“We do have foreign buyers—anyone outside of the Ottawa footprint, whether that’s coming from Toronto or overseas. We have an influx of buyers from overseas coming in with cash offers,” Tisiot said before adding that financing conditions have gone the way of the dodo.

“They may have the inspection clause in there, but at this point buyers are just going in with no clauses at all, especially the foreign ones because they have cash. It doesn’t matter if it appraises or not, they’re going to pay it.”
 
Related stories: Ontario cities with the least and most pricey homes, Investing in Ontario real estate? These cities are the best bets

Ontario cities, the least and most pricey homes


 
by Ephraim Vecina May 2018 MBN

Despite the Ontario government’s implementation of the Fair Housing Plan around a year ago, affordability remains a core concern among current and would-be home owners. A new study by Toronto-based real estate information website and brokerage Zoocasa looked at fresh data to determine the most and least affordable cities in the province.

Zoocasa analyzed median household incomes from Statistics Canada as well as average April 2018 home prices provided by the Canadian Real Estate Association (CREA), and determined that Thunder Bay is currently the most affordable Ontario city for home seekers, with a Single-Income Ratio of 6 and a Dual-Income Ratio of 2, along with an average home price of $217,745.

Other pockets of affordability in the province are:

  • Rank 2: Sudbury
    Single-Income Ratio: 9
    Dual-Income Ratio: 3
    Average Home Price: $268,696
  • Rank 3: Windsor
    Single-Income Ratio: 9
    Dual-Income Ratio: 4
    Average Home Price: $303,183
  • Rank 4: Ottawa-Gatineau
    Single-Income Ratio: 9
    Dual-Income Ratio: 4
    Average Home Price: $418,232
  • Rank 5: Kingston
    Single-Income Ratio: 10
    Dual-Income Ratio: 4
    Average Home Price: $366,582

Read more: Luxury home prices ‘relatively resilient’ despite lower sales in GTA and Greater Vancouver

As for the cities that ranked lowest in terms of affordability:

  • Rank 1 (Least Affordable): Greater Toronto
    Single-Income Ratio: 20
    Dual-Income Ratio: 9
    Average Home Price: $804,584
  • Rank 2: Hamilton
    Single-Income Ratio: 16
    Dual-Income Ratio: 6
    Average Home Price: $569,490
  • Rank 3: Oakville
    Single-Income Ratio: 15
    Dual-Income Ratio: 5
    Average Home Price: $719,000
  • Rank 4: Durham
    Single-Income Ratio: 14
    Dual-Income Ratio: 6
    Average Home Price: $604,51
  • Rank 5: Peterborough
    Single-Income Ratio: 14
    Dual-Income Ratio: 6
    Average Home Price: $448,875

 
The surprise presence of Peterborough, which is situated quite a ways from Toronto, “suggests that there could be growing demand from buyers priced out of the GTA that are willing to commute from much further afield – and incomes in these cities have not caught up to the average home price,” Zoocasa stated.

Related stories: Retirees stoking demand in recreational market – survey

Retirees stoking recreational market – survey


 
by Ephraim Vecina May 2018

A fresh study has found that retirees were the main driving factors of activity in 91% of Canada’s recreational property markets.

According to the latest RE/MAX nationwide survey, a growing number of retired and would-be retiring consumers in British Columbia, Ontario, and Atlantic Canada are purchasing recreational properties outside of urban centres for use as retirement homes, a trend that is blurring the line between recreational and residential properties.

“Last year, we found that Baby Boomers and retirees were increasingly selling their homes in urban centres like Toronto and Vancouver,” RE/MAX of Western Canada regional executive vice president Elton Ash said. “It’s clear that many put the equity they received from those sales into the purchase of a recreational property with the intention to retire in comfort and away from the city.”

24% of those surveyed indicated that they would consider buying a recreational property in the future. 54% of Canadians will source their recreational property purchase payments from their savings, while 20% will get funds from their home equity or loans.

Distance is no object to 68% of current or would-be recreational property owners, as this segment is willing to travel up to two hours to their purchases. 31% said that they would travel for two hours, while 28% are willing to travel three or more hours.

In a separate survey conducted by Leger, 58% of Canadians said that they enjoy recreational properties as places where they can relax and spend time with friends and family, although 84% do not actually own properties in this category.

“Many Canadians want to live out the ‘Canadian Dream’ and spend time at the cottage or cabin but today, that doesn’t necessarily mean owning a recreational property outright,” RE/MAX INTEGRA Ontario-Atlantic Canada Region executive vice president and regional director Christopher Alexander said. “Many are choosing to rent recreational properties, often by pooling resources with friends and family, which speaks to recreational properties still being in high demand.”

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