The Real Estate Gamble?

I just came across an article on that discusses the risks of assuming that your home will fund your retirement.
A growing number of Canadians view their home as their ticket to retirement comfort. This article asks, is that wise?
The article states that there are huge risks that come with this approach, mainly:
-What if house prices crash as the baby boomers start to downsize?
-The growing view that our housing market is “bubbly”
-Many new home buyers may not even have their homes paid off by the time retirement age arrives. Have you ever heard of a “mortgage burning party”? This elusive party celebrates a person’s newfound freedom after paying their mortgage down to $0. I can remember my parents mentioning these parties back in the ‘80’s. I don’t think I’ve heard of a single one in my adult years! If they exist anymore, they must be few and far between.

Our world has definitely changed in a short period of time. While funding one’s retirement through home ownership certainly has its risks, I must point out that everything comes with some level of risk. If you leave your money in a bank account you will accrue very little interest income (but will have very low risk), if you invest in the stock market you have the opportunity for big gains (and losses) depending on how your invest, and, if you purchase a home you do run the risk that the house will not increase in value the way you had hoped. When planning your retirement strategy I think it’s really important to speak with a knowledgeable financial advisor to determine your best course of action and how you can diversify your assets and savings to lower your overall risk!
Click on the link below to read the full MACLEANS article!


  1. Natalie,

    This a good blog topic for conversation right now.
    To me as a person and as a Realtor, home-ownership is first and foremost having a place to live.

    I actually do run across quite a few home-owners who are what is called "clear title", which means they have no mortgage or loans registered against the title of their home. These days people don't seem to have a big party when they finish the mortgage.

    Most homes do appreciate in value, on average, as the years go by. Real estate is cyclical, but the trend has been up over the long-term.

    In my opinion, everyone should save for their retirement as best as they can. Enjoy your home and make renovations the that suit you, and not just for potential future buyers. When it comes time to look at selling your home to down-size or to move to somewhere closer to family say, then consult a Realtor like me. We can look at what your options are and how much you can expect to realize from the sale of your home.

    Lastly, if you look into those companies that offer a reverse-mortgage, they will lend you money against the value of your home to be paid back when you sell your home. But, do your homework and see if it's right for you.
    They register this loan against the title of your home. It can be a way to free up money when you want it.

    I hope this helps, and I hope it adds to more discussion.

    Ben Officer, CD REALTOR®
    RE/MAX Real Estate (Edmonton)

  2. It's sad to hear that people aren't celebrating paying off their largest purchase with a huge, roaring party anymore! That's just not very festive! (Perhaps they don't want to make their friends jealous?)
    I believe the MACLEANS article said that approximately 37% of Canadians over 55 still have a mortgage. It would be interesting to see statistics on the % in each city...


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