"28 per cent of Canadian homeowners over the age of 50 plan to sell their houses to fund their retirements"

Rising interest rates will likely cause the beginning of the coming Vancouver RE price descent. The middle of the crash will be fueled by the panic of speculators. But the slow coup de grâce will likely come from the boomers unloading their housing nest-eggs. -vreaa

These statistics and then commentary from the Macleans.ca article by Jason Kirby 17 Dec 2009 9:33 am -

- 38.5 per cent of wealth in Canada is now tied to home ownership, up dramatically from 16.3 per cent two decades ago

- As of 2006, nearly 69 per cent of Canadian households owned their own homes, up from 63.6 per cent a decade earlier. [Figure will now be >69% -ed.]

- Between 1999 and 2007 home values in Canada rose 66 per cent, leaving Canadians feeling a lot wealthier. After falling around eight per cent during the recession, prices are virtually back to where they were at the peak.

- Average savings had fallen to just $2,000 a year, or less than three per cent of disposable income, putting Canada well behind other developed countries like France (12 per cent) and Germany (11 per cent).

- 28 per cent of Canadian homeowners over the age of 50 plan to sell their houses to fund their retirements, according to a survey by Royal LePage in 2006

- An estimated 37 per cent of Canadians over the age of 55 still have outstanding mortgages.

“Assuming you still plan to use your house as a retirement vehicle, there’s something else to think about­—you’re not alone. Millions of Canadians are all betting on the same strategy, and that could lead to serious problems down the road. One very real fear is that the barrage of boomers expected to retire between now and 2030 will drive down the housing market. There may simply not be enough younger buyers to absorb all those condos and townhouses boomers hope to unload. For one thing, the net growth in the number of new households forming in Canada each year—a key driver of the residential real estate market—is expected to slow, from 1.4 per cent in 2007 to 0.8 per cent in 2030. By that year, when all the boomers will have turned 65, it’s estimated there will be just two workers for each retiree. “If everybody comes on the market at the same time, prices are going to go lower,” says Merrick. “The people at the top who are planning to use their homes for retirement are going to face major downward pressure, because if there’s no one feeding the market at the bottom, there’s no one who can move up and buy your house. Demographics say it all.”