Selling Your Home To Leave The City: Is It Right For You?

CBC reports that a new Royal LePage survey found that about half of Baby Boomers surveyed in Canada planned to sell their homes and downsize.

According to Royal LePage, many of these Boomers want to move to smaller, more affordable communities.

At BGS Homes Inc., we have seen the latest phases of communities in locations such as Norwich and Norwood sell out, with Boomers being a significant percentage of buyers.

Here are several tips to determine if selling your City home is right for you:

1.  Have you saved enough money for retirement?  A recent survey by CIBC found that respondents believed that $756,000 was the amount respondents thought was necessary for retirement.  The survey also found that 90 percent of respondents did not have a plan to get there. 

According to TREB (the Toronto Real Estate Board), in the GTA in July, the average sale price of a home was over $1 million. Semi-detached homes averaged $746,000 in the GTA during the same period.

So if you are lucky enough to own a home in Toronto and paid off your mortgage, selling your home in the city and moving outside of the city could help you get close to that $756,000 goal!  Visit www.bgshomes.com to see some of our latest communities and how to learn about pricing.

2.  When should you sell?  That same TREB survey showed that detached homes only increased 0.5% in the GTA between July 2017 and July 2018.  That increase is lower than many savings accounts pay!

Over time the history of the real estate market in the GTA has been up, but downturns do happen, as has been seen during certain periods of the past year. 

What would happen if all Baby Boomers sold at the same time to cash out?  While that hopefully does not happen, if it did, it may cause a downturn.

There are many factors to consider when selling, but if you are near or in retirement and have no retirement savings, selling when prices are still strong may be worth considering and discussing with a real estate professional.

3.  Will I get bored moving out of the City?  We have built many communities within an hour and half or so outside of Toronto.  A trend we notice is that people get to know their neighbours in smaller communities.  You may be surprised of the fun you will have and people you will meet, all while still owning a detached home.

Further if you live within an hour and a half drive outside of Toronto, you may be able to attend your favourite sports and entertainment events in Toronto on weekends, when traffic is lighter, and spend less time driving than many people commute in weekday rush hour!

Housing Affordability May Be Declining In Canada… But There Are Solutions Near Toronto

According to a recent RBC Economic Research report cited by BNNBloomberg:

“[A]ggregate affordability measure rose four percentage points on a quarterly basis to 48.4 per cent, signalling that more of homeowners’ household income would need to be devoted to the cost of ownership…”

Here are some potential ways that some aspiring homeowners can deal with this problem:

1. If you are able to work from home, consider moving out of the GTA. Within a two hour drive of Toronto are numerous quaint communities where a new home costs significantly less than in the GTA.
2. Don’t give up the hope of home ownership. It may be easy to think there is no point saving your money when housing prices are as high as they are. However the housing market, like any market is subject to cycles.  If you save money on that daily latte, some day may come when your income may also be higher and homes are more affordable.
3. Resist the temptation to Keep Up With The Joneses. You may have friends who appear to be living the high life with a home much larger than they really need. But they also may be living pay-cheque to pay-cheque to afford some luxuries they don’t really need. If you get in the habit of saving, you may view such items in terms of the time it takes you to save that much money, inspiring more saving.