RBC Poll – “45% of British Columbians are relying on selling their home to pay for their retirement.”

“People in B.C. are the least optimistic of Canadians across the country about their retirement, a new poll by RBC found. …
Nearly half — 45 per cent — said they are relying on selling their home to pay for their retirement.”

‘People in B.C. worried about their retirement, poll finds’, The Vancouver Sun, 9 May 2012

As we have been saying…
People in BC are over-dependent on their RE holdings for their future financial well-being.
So, imagine.. you’re 5 or 10 or 15 years from retirement, you’re dependent on the value of your home for your retirement funds, and housing prices start dropping… 10%, 15%, 25%… what do you do?
– vreaa

[Post-script: When you consider that only 70% of BCers own their homes, that 45% figure is massive… assuming the poll was a balanced sample, it means that over 60% of BC home-owners plan to sell their homes for retirement funds!]

15 responses to “RBC Poll – “45% of British Columbians are relying on selling their home to pay for their retirement.”

  1. Did they poll 4 year olds? Wonder if the doll houses will go all reverse mortgage

  2. 45% of British Columbians are relying on selling their home to pay for their retirement

    where are they going to live?

  3. Why would somebody who doesn’t own their home respond ‘yes’? When they say 45% one can only assume they mean 45% of homeowners.

    • Somebody who doesn’t own their home would answer “I don’t own my home”, and they would be counted as one of those British Columbians who are not going to sell their home to fund their retirement.
      So, no, we can’t ‘assume’ they mean 45% of homeowners.
      Regardless, either ‘45%’ or ‘over 60%’ is a massive amount of BC homeowners planning on selling, don’t you think?

  4. I think the heading that almost half of BC residents are going to sell their house to pay for retirement is a bit of a stretch, the title makes you think this will be their only income source. In fact if you work full time until 65 a married couple can expect almost 35K just from CPP and OAS even if their never saved another penny.

    I am an investment advisor in Victoria who deals mainly with older wealthier clients, I would guess that 25% of my clients over 55 look at their home as an alternate source of retirement funds. Stock markets have under performed over the last 10 years while house prices have doubled, it only makes sense to sell a large house and move into a smaller residence and pad their savings. I am also seeing a trend of older clients selling all togeather and renting.

    • Ken -> Thanks for the comment.
      The title doesn’t exclude the possibility of CPP and OAS income stream, it is what it says: a poll reveals that 45% plan to sell their homes.
      As you point out, for many it makes sense to sell.
      The essence of this all, from our perspective, is that those who are relying on their RE holdings for their financial security represent future supply; perhaps precipitous supply when prices start a descent.

    • “I am also seeing a trend of older clients selling all togeather and renting.”

      Guess there will be hedging in upscale geriatric care. Yeah, cash is king, until they print more. It’s always fun to roll around in. Interesting to know a couple of the streams you think have good show.

    • Do we know what type of dwelling will be the standard choice for downsizing?

      Some data on older cohorts and the choices they make regarding housing would be interesting.

      I threw a few age cohorts numbers on Mohican’s blog for viewing.

    • So older, wealthier clients who have an investment advisor and live in an area that is already going through a depressed real estate stage are not as reliant on real estate to retire as the rest of older people in this province? That makes sense, right?

  5. Is it possible that household size in owner occupied dwelling is larger than rentals? That may explain the results. Imagine if 50% more individuals lived in owner occupied. The survey is 45% of people plan to rely . . . not 45% of households plan to rely…

  6. I have been telling clients for the past 5 years that I expect housing prices to
    stagnate for the next decade, this has more less been true on Vancouver Island, I am not a real estate and am only basing this on financial metrics. Lets face it long term the trend is still for people to migrate to cities, that and restrictive land use polices should keep long term home prices in cities higher then average.

    My older clients who sell all togeather tend not to be that wealthy,they tend to be single more likely to be a women with say a few hundred thousand in savings and low pension income, no estate planning goals. Selling a 300-500K residence is a decision that historically would have been generraly unheard of unless you were moving into a retirement home. These people are also living longer, health care costs are rising and today’s elderly want to spend more money then the previous depression generation who only saved and never spent.

    I fully expect this trend to continue as I expect stock markets to under perform for the next 5 year, people have less pension income and pensions are cutting back on benefits and indexing, also health care costs are rising and people are living longer.

    I am not a real estate bear expecting a collapse in prices at least in my area, I have no idea about the Vancouver market.I just see that all of the stars have aligned for real estate over the past decade, such as demographics, low interest rates etc.. once some of these variables change prices will also change.

  7. “Only 70% of BCers own their homes”???!!! That ownership rate is astronomical from a historical perspective.

    • Agreed. The ownership rate is at historical highs. And this fact is one of the many data points that lead to the bear case — ownership rates are unlikely to go higher. We have discussed this elsewhere before.
      In my ‘PS’ above, my use of ‘only’ was imprecise and ambiguous, forgive me… I said ‘only’ to put the 45% in context… as in ‘not 100%, but only 70% of BCers own they homes’. Not to imply that 70% is a small number, but to say that it is a fraction of the whole.

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