Cole Burston/The Canadian Press
Oh, hi again. Today we’re diving into how a softer housing market is playing a major role in Canadians’ downsizing decisions. Let’s get into it.
To downsize or not downsize?
A weak housing market doesn’t just slow sales. It can ripple through the entire system, making it harder for first-time buyers to get a foothold.
A new survey from Chartered Professional Accountants of Canada found most Canadian homeowners are staying put, with 61 per cent of those who had considered moving now sidelined, either waiting for prices to improve or facing financial constraints that make selling less appealing.
At the same time, only about one-fifth of Canadians 55 and older say they plan to move into a smaller home.
That may be partly because people are living longer and, in many cases, are financially comfortable enough to stay where they are. For some, it’s also about preference. More Canadians want to age in place, with the space and familiarity their current homes provide.
And downsizing itself is no small task. Moving is disruptive at any age, but it can be especially daunting later in life, with the physical, emotional and logistical challenges that come with it.
The result is a kind of gridlock. Older homeowners aren’t moving out, fewer homes are coming onto the market, and younger buyers are left trying to squeeze into an already tight entry point however they can.
“This suggests a housing market that is increasingly stuck, with many homeowners holding onto starter homes longer than expected,” said David-Alexandre Brassard, CPA Canada’s chief economist, in a statement.
“Limited movement is reducing turnover and slowing overall market activity.”
The Calculator
What’s happening: Ontario’s cottage market could be stabilizing after years of swings, but activity is slow. Buyers are cautious, and a wave of mortgage renewals at higher rates is putting pressure on some owners to sell.
Why it matters: The market is starting to split. Wealthier buyers are keeping high-end cottage sales steady, while more leveraged owners may drive price drops, shaping where the market goes next.
Have Your Say
Globe reporter Salmaan Farooqui is looking to speak with homeowners who have renewed their pandemic-era mortgages over the last year to understand how Canadians are dealing with higher interest rates. Did you have to increase your amortization? Did you reduce spending in other areas of your life? Did you have to downsize or move to a cheaper location? E-mail Salmaan at sfarooqui@globeandmail.com
The Retirement Receipt
How a retired nurse built a $750,000 TFSA
The numbers: A retired nurse in her mid-70s steadily maxed out her TFSA since 2009, contributing about $109,000 in total. Her TFSA is now worth more than $750,000. One standout winner did most of the heavy lifting, with growth driven largely by long-term holdings in Apple Inc. She holds a broader portfolio across other accounts, including stocks, real estate and business interests.
Best of the Rest
💸 Gifting money to your kids can help pass on wealth, but it’s not simple. While cash gifts are generally tax-free, giving assets such as stocks or real estate can trigger capital gains taxes, and even income earned on gifted money to minors can be taxed back to you.
📱 Investing apps are getting more game-like, but that can come at a cost. As personal finance columnist Rob Carrick writes, features such as free trades, options strategies, and prediction-style bets can make trading feel easy and even entertaining. But when investing starts to feel like gambling, he argues, it can push people toward riskier decisions that ultimately hurt long-term wealth.
🥾 How joining a hiking club can quietly change your life. What starts as a way to get outside and meet people can turn into a gateway to travel, adventure and a deeper sense of community. It’s a reminder to put yourself out there and maybe find purpose in unexpected ways.
🤖 AI has some older workers calling it quits. For many, it’s not just about money. The pressure to constantly learn new tools and adapt to rapid change is pushing them to retire earlier than planned, especially if they already have a financial cushion. (Paywalled)
Try This
💡 Finding income is getting harder as yields fall, but there are still ways to make it work. Investment reporter David Berman says to look beyond the usual options: Take advantage of short-term, high-interest savings promos, consider companies that return cash through share buybacks, and explore lesser-known dividend stocks (with caution).
