It’s a great time to right-size your home
A seller’s market is the best time to downsize and capitalize on your increased equity
Dear Money Lady: Is now a good time to downsize, since house prices have gone up so much? Do you think the prices will stay high? — Gordan Gordan – You are correct. It is finally a true seller’s market again.
Last year broke many records in the Canadian housing market with higher sales than even 2020. Despite the historical bump, it is believed that there are still many buyers out there wanting and willing to pay more.
The only thing holding these buyers back these days is the lack of supply.
According to our provincial real estate boards, British Columbia, Ontario and Atlantic Canada had the greatest number of sales last year with an average increase of 30 per cent from 2020. Prices escalated as demand surged in small rural areas too.
The Prairies seemed to still get modest price increases, but lacked the frenzy that was reported in Vancouver, Toronto and Montreal. Could this be your year to downsize? Definitely, maybe!
If you are downsizing into a less expensive home or plan to cash-out on real estate to supplement your retirement, it would be a good time to consider making a move. Several provincial governments have set up task forces to recommend additional measures to slow down the housing market. Housing policy changes are continually being discussed at all levels of government to deal with the intense pressures to address affordability issues. Most economists believe policy initiatives will be announced this year with changes anticipated most likely before the summer of 2022.
Immigration has accounted for most of the population growth between July 2020 to August 2021 with some surprising increases in smaller cities across the country. According to Statistics Canada, the largest growth centers across the country are as follows:
• Carleton Place, Wasaga Beach, Woodstock, Oshawa, Collingwood, and Arnprior in Ontario.
• Cowansville, Salaberry-deValleyfield, and Lachute in Quebec.
• Kelowna and Squamish in
British Columbia.
• Halifax in Nova Scotia.
• Summerside in Prince Edward Island. • Moncton in New Brunswick.
• Whitehorse in the Yukon.
For those anticipating retirement soon, being in a seller’s market makes it the best time to downsize and capitalize on your increased equity to eliminate debt and top up your savings. As you age, your current home might not be suitable anymore and right-sizing to a new situation may be better for your health. The stairs in your home or the outdoor maintenance such as gardening, and snow removal could be a real issue as you age. And if you move into something less expensive, remember all expenses tend to go down too. Property taxes and utilities are usually lower in a smaller home when you downsize to a less expensive area.
Many people who have lived in their family residence for decades may find it difficult to consider downsizing at retirement. There are a lot of memories tied up in their homes. To help overcome this hurdle, it is important to focus on the future positives of downsizing. Change is always scary at first, but just think, if you have less expenses, less money worries and less household chores, you can now spend that time doing the things you love. Spend more time with your family, socialize and start traveling. You’ve heard the saying that retirement is all about your “golden years,” so believe you deserve to enjoy this time with love, happiness, and comfort.
Good Luck & Best Wishes, ATML - Christine Ibbotson
Written by Christine Ibbotson, National Radio Host and Author of 3 finance books plus the Canadian BestSelling Book “How to Retire Debt Free & Wealthy” www. askthemoneylady.ca or send a question to info@ askthemoneylady.ca