“About a third of Baby Boomers plan to sell their home to fund their retirement. They shouldn’t be relying on their homes. Even if prices don’t plunge, big increases in property values are a thing of the past.”

“About a third of Baby Boomers plan to sell their home to fund their retirement, according to a study that questions whether buyers will dry up as that massive segment of the population downsizes.
Bank of Montreal is warning Boomers not to count on that nest egg, while other observers suggest that even if prices don’t plunge, big increases in property values are a thing of the past.
“They shouldn’t be relying on their homes because there are risks,” says Marlena Pospiech, a retirement strategist at the BMO Retirement Institute.
The bank suggests the following risky scenario: As Canada’s population ages, more Boomers will be retiring and selling their homes, putting downward pressure on prices.”
- from ‘Boomers warned using home sale to fund retirement could backfire’, Garry Marr, Financial Post, 31 Oct 2012

Gee, now where have we been hearing this warning, for, umm, the past 4 or 5 years?
As we said on an earlier post today: “Opinions previously held only by lunatic bears-on-blogs are being expressed mainstream.”
Note how the possibility of price “plunges” are now also entering the mainstream discussion.
- vreaa

20 responses to ““About a third of Baby Boomers plan to sell their home to fund their retirement. They shouldn’t be relying on their homes. Even if prices don’t plunge, big increases in property values are a thing of the past.”

  1. Boomer trigger. Boom Shakalaka boom boom!

  2. It’s still shocking to see these newly discovered brainstorms from four years back still being refuted by the bulls and agents that haunt these BC housing blogs. Denial is still so rampant and refusal to look at the macro world just blows my mind.

  3. Second-guessing demographics, in my view, misses the point completely. The construction market has been quite capable of producing more than enough dwellings to house everyone in every state of life.

    The demographic analysis BC Stats has done indicates there will be no shortage of families to fill family-style housing in the coming decades. What is up for debate — and what should override all demographic analysis — is how much these families are willing and able to pay.

    • Sure.
      But I’m missing your point.
      Isn’t the cause of downward prices going to be multifactorial?
      Increased relative supply, tightening of lending standards, economic weakness, deflated sentiment, absence of animal spirits, etc, etc… Boomer supply will be part of that.
      ..
      BTW, we, and many others, have talked of ‘Boomer Supply’ many times, HERE for instance.

      • The cause of prices reverting to where earnings make sense, arguably, is little more than prices being too high. Demographic shifts, population growth, migration, availability of financing, sentiment, et cetera, are catalysts determining timing but not the eventual price level.

  4. All this talk about “no land” is really funny. Look at the whole Cambie corridor and all the duplexes that can be sold and developed. SFH?, lots of land out in the valley, even in Richmond. And in Vancouver? All I see are huge mansions being build, in place of the old bungalows, with NO BUYERS. Tastes have changed and people don’t like living in big McMansions having to drive everywhere.

  5. Real Estate Tsunami

    A little off the topic.
    There was a neat website re.olvious, which showed daily new listings and listings that had changed in the Lower Mainland.
    As we all know, detailed information about re transactions are closely guarded by the Realtors, so I became quite addicted to checking this website daily.
    But now, it’s no longer functional.
    Anyone knows what happened.
    Thanks

  6. hmmm… lets see…offered $1,050,000.00… today.
    Paid $315,000.00. Owe $150,000.00…..
    Property taxes going up 27+% a year…
    $100,000.00 none refundable deposit goes with acceptance…
    Can buy what I want outside the lower mainland…. for $250 to $350 G’s now with 20 – 200 acres….
    Oh yah Assessment ….. got dropped down to $496,000.00 last year from $850,000.00 and now back up to $520,000.00 this year… changed nothing. and they can’t show me how they did it… not one doc.
    The Assessments are pure shit… made up… counterfeit. Just used to raise and increase the tax base, you know extra taxes for raises without you getting to vote on the mil rate amount.
    P. taxes now 3 X my mortgage payment… Neg. Equity position
    Told by the Crown’s Law Officer that I don’t own my Fee Simple Absolute Property period, the Crown does and can do whatever it wants…to the tax base. Why would I not sell….
    I think I’m so gone…
    from Shitcouver…
    Silver

  7. Well lets see, after 5 years of asking questions about property taxes and the laws behind them…
    Check out the concept of Fee Simple Absolute Property, and Quit rent…
    and the whole Constitution of Canada, not the 33 part mini version that the public welfare bums keep showing you… back to King George and the founding of Canada as a “Corporation” bound by the” laws of equity”…
    Quit rent was to be on the lawful sale value, not speculative value.
    So that the “Nobles” could not steal your property through counterfeit increases in Property Taxes. Artificially increasing/counterfeiting the bases value to which is applied the voted on Public Mil-Rate. Good way to justify 30%+- wage increases for Public officials…

    So fir the “Your richer tan you think crowd” pain… great pain…
    …. in the future there will be a lot of people who put zero, 5%,10% and 15% down andTruely believed the ASSessment was a promise of Real market value by the Government ASSessment agents… who will be underwater and demanding answers…, when they realize how deep the fraud goes…
    … they have all borrowed money based on this claim of value, I mean Ponzi scheme…
    I wouldn’t want to be a public welfare bum who made their wages, raises, and money from taxpayers being gouged by the ASSessments…
    The pain will rip a new asshole in the budgets…
    ..And if your actually interested its the ASSessment revue panel that sets the ASSessments Value. Not the city, and not BC ASSessments. The “revue panel” is the source of all the end documents values and their Counterfeit Authority. Period. They are the administrative authority enforcing the value of the ASSessments. perhaps you will understand the legal concept.

    Ever notice how many multi-million dollar homes have Rigged Property ASSessments lower by half over the claimed market value… wonder how many belong to public officials claiming fair taxes are being applied….Yah right…

    Oh … and the wife is in agreement.. time to sell… and then rent…
    Silver

    • “time to sell… and then rent”

      Isn’t it amazing how, even at this very late date in the cycle, this plan may still work (for the bold seller)?
      RE markets really do move like molasses in the Yukon.

      • This is me. I want to cash out too. Am I a speculator for waiting? Is Calgary poised to drop like Vancouver? How soon do I need to make a move? Please help.

      • We can’t really comment on Calgary.
        If you were in BC, however, you know what our answer would be.
        And the whole of Canada may well be facing various versions of the anticipated Vancouver descent.
        So, yes, if your financial future is overly dependent on the value of your RE holdings…..

  8. I can be very bold, down to $315,000.00 if I wanted to… please note unlike many who have been wiser than me about the market, and levered cash against their property,… I’m not underwater… and have never borrowed against my home… cash is king in a market like we have here…
    the gentlemen with the offer for us has the money and the time to wait this out… and the terms include extensive time to move out… no major conditions… so we will see…fingers crossed….
    Silver

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