The Canadian real estate landscape is witnessing a significantly positive outlook for sellers as January wraps up. The median selling price has taken a hike with the biggest annual pace in the last four years. The average price of a Canadian home sold in January at $504,350 shows an increase of 11.2% from the same time last year.
It seems like baby boomers, as the long-time Canadian homeowners, is the largest group to benefit from this interesting turnout. As baby boomers switch to downsizing or transition to retirement plans, the real estate market is proving to be a rewarding choice for them.
For those aged between 55 to 75, the investment they made on a family home might be their biggest asset. With the Canadian housing market outpacing the real estate appreciation of many cities in the US, the decision seems to be fairly easy for retirees to cash out on their houses.
If you fall into this category, see how you can gain the most merits now with the top real estate agents through UpNest. Here are some real-life examples and what to learn from them.
If you own a Vacation Property
The idea of being cottage owners sounds very enticing, and that may be why many Millenials are trying to invest in vacation homes rather than to buy an outrageously priced city apartment. With Airbnb and vacation rentals making it possible to earn secondary income from these investments, young people are very keen on making cottages and beach houses their first real estate purchase.
This couple, in their 60s is renting a condo while owning a beautiful cottage on the lake. The wife is about to retire with a pension plan and the husband will soon follow her with an RRSP in place. While they enjoy their cottage, it is only fair to admit that they do not always use it and even with the increasing value that they will not be able to afford it with the outstanding mortgage.
Their best scenario was to sell the cottage which allowed them to pay off mortgage and complement retirement savings. This applies to everyone who is retiring soon and has a second property on the mortgage.
If Travelling is in your Bucket List
It is becoming increasingly common for retirees to pursue traveling. The couple, who moved to Canada 30 years ago, hopes to spend six months traveling, and six months back in Canada. Their first idea was to rent out their house all year round and stay with friends or family, or on their boat while they are back in the country. They preferred owning the rental to aid their investments and generate monthly payments while providing information protection.
The annual rent they could expect was only three percent of the current market value. Once they realized how low this is with their net worth being tried to their house value, the couple found it better to look into other alternatives. Their first choice was to downsize to a condo, that would generate more annual rental income with less maintenance.
It is also most likely that many such couples would prefer smaller condos after years of travel. They are more rentable, comfortable to maintain and you can certainly reap off benefits by selling large houses today.
If You Have Health Issues
In this case, the wife developed a progressive health issue soon after she and her husband retired, requiring a caregiver most of the time. They currently own a five-level house, that makes it difficult to move around as well as require maintenance. Additionally, the medical treatments had also made a dent in their retirement savings.
The best scenario for them would be to sell this house for a more practical one. While they are putting off this thought for a couple of years, the cost of moving would involve both financial and emotional consequences. The realtor advised them to opt for a retirement community with health care assistance.
If baby boomers are looking for reasons to sell your real estate now, the market seems to be favoring you. All the above cases give an account of different situations which many old aged people are facing right now. Downsizing is much in favor everywhere.
One thing to consider is whether the following generations would appreciate the property and the cost of maintenance with the same enthusiasm. With Millenials choosing cheaper and smaller homes, the best bet is to take advantage of the high selling prices in real estate right now, as long as it lasts.