Houses on a hill in Vancouver, on Nov. 23. Near-retirees are too dependent on their houses for wealth, according to a report from Deloitte Canada.DARRYL DYCK/The Canadian Press
Canadians heading into retirement are in a great position, said no one ever.
But even by this usual standard of negativity, a new report on retirement by Deloitte Canada is a stunner. It says that 55 per cent of people aged 55 to 64, about 1.7 million individuals, will have to make lifestyle compromises to have a comfortable retirement. Near-retirees are too dependent on their houses for wealth, they invest too conservatively and they don’t have access to the advice and investing products they need.
The Deloitte reports includes some suggested remedies, including more options for people tap into their home equity to finance retirement. But the takeaway for people retiring in the next few years can be summed up follows: Find a way to save more, or scale back your retirement lifestyle expectations.
The report is based on a study of 4,000 households of people between 55 and 64 who are heading into or already in retirement. Fourteen per cent of these households are in great shape for retirement, and 31 per cent are low-income households that will find their employment income largely replaced by the Canada Pension Plan, Old Age Security and possibly the Guaranteed Income Supplement.
Eighteen per cent can afford retirement, but will need to lower their lifestyle expectations, while 37 per cent are at risk of not having enough to get by, even when including personal savings, government pensions and GIS payments.
The Deloitte report demands attention because, refreshingly, it comes from a consulting company and not a bank or investment company angling for more customers. The report is also original in that it acknowledges the impact of expensive housing on retirees, and debt as well.
About 25 per cent of retirees have a mortgage, the report says. “Sure,” home-owning, near-retirees are saying at this point. “But at least I have my home equity.”
The Deloitte report is not sympathetic to this line of thinking. First off, it notes that home equity has traditionally been hard to access as a source of money to pay costs like basic living expenses in retirement.
“There also appears to be a prevailing taboo around using real estate to fund retirement,” the report says. “We found that only 17 per cent of near-retiree Canadian households would consider using their real estate to supplement their retirement income.”
Reverse mortgages are one option for tapping into home equity, but the report says the fees involved affect their appeal. Also, there are only two companies providing this product on a large scale. To improve public confidence in reverse mortgages, the reports suggests that regulators introduce rules governing how these products are managed.
Despite its questionable utility as a source of retirement income, home equity’s share of individual wealth has grown to 46 per cent in 2019 from 38 per cent in 1999. This growth rate surpasses private pension and non-pension assets.
Rising home values explain this trend in part, but price growth has either stalled or turned into price declines in some cities recently. Compounding this, the Deloitte study notes a tendency for people to overestimate the value of their real estate.
A unique aspect of the study is its acknowledgement of the effect on retirement saving of supporting adult children financially. Here, again, housing is a factor. In addition to helping their kids with money for down payments, parents are providing money to cover the costs of owning a home and covering the mortgage payment increases many young buyers have experienced since interest rates began climbing.
A rough, Deloitte-suggested diagnostic for your retirement readiness: To maintain a modest lifestyle until the average life expectancy of 82, near retirees should have at least $340,000 in savings, pension money included. Of course, many people will live longer than that and require substantially more savings to cover long-term care costs.
One more step suggested by the report is to check the mix of stocks and bonds in your retirement investments. A conservative approach with a preponderance of bonds can reduce the volatility of your portfolio and the pain of stock market declines, but it also reduces your benefit from stock market gains.
A few other recommendations apply to employers and the financial industry, and they’re worth highlighting. One is to create more investment products designed to pay income in retirement. Two current such products are the Vanguard Retirement Income ETF Portfolio (VRIF-T) and the Purpose Longevity Pension Fund.
Also, employers should do more to encourage participation in their retirement savings programs. Mandatory participation would be controversial, but also serves the greater good.
I’m tracking the extent to which parents are helping their adult children with housing costs. If you gave your kids money for a home down payment, to cover rising mortgage costs or for other housing-related purposes, please take this quick, anonymous survey.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
MONTREAL – The Quebec Professional Association of Real Estate Brokers says Montreal-area home sales rose 9.3 per cent in August compared with the same month last year, with levels slightly higher than the historical average for this time of year.
The association says home sales in the region totalled 2,991 for the month, up from 2,737 in August 2023.
The median price for all housing types was up year-over-year, led by a six per cent increase for the price of a plex at $763,000 last month.
The median price for a single-family home rose 5.2 per cent to $590,000 and the median price for a condominium rose 4.4 per cent to $407,100.
QPAREB market analysis director Charles Brant says the strength of the Montreal resale market contrasts with declines in many other Canadian cities struggling with higher levels of household debt, lower savings and diminishing purchasing power.
Active listings for August jumped 18 per cent compared with a year earlier to 17,200, while new listings rose 1.7 per cent to 4,840.
This report by The Canadian Press was first published Sept. 6, 2024.
In the quest to find cities where renters can enjoy the best of all worlds, a recent study analyzed 24 metrics across three key categories—Housing & Economy, Quality of Life, and Community. The study ranked the 100 largest cities in Canada to determine which ones offer the most to their renters.
Here are the top 10 cities that emerged as the best for renters in 2024:
St. John’s, NL
St. John’s, Newfoundland and Labrador, stand out as the top city for renters in Canada for 2024. Known for its vibrant cultural scene, stunning natural beauty, and welcoming community, St. John’s offers an exceptional quality of life. The city boasts affordable housing, a robust economy, and low unemployment rates, making it an attractive option for those seeking a balanced and enriching living experience. Its rich history, picturesque harbour, and dynamic arts scene further enhance its appeal, ensuring that renters can enjoy both comfort and excitement in this charming coastal city.
Sherbrooke, QC
Sherbrooke, Quebec, emerges as a leading city for renters in Canada for 2024, offering a blend of affordability and quality of life. Nestled in the heart of the Eastern Townships, Sherbrooke is known for its picturesque landscapes, vibrant cultural scene, and strong community spirit. The city provides affordable rental options, low living costs, and a thriving local economy, making it an ideal destination for those seeking both comfort and economic stability. With its rich history, numerous parks, and dynamic arts and education sectors, Sherbrooke presents an inviting environment for renters looking for a well-rounded lifestyle.
Québec City, QC
Québec City, the capital of Quebec, stands out as a premier destination for renters in Canada for 2024. Known for its rich history, stunning architecture, and vibrant cultural heritage, this city offers an exceptional quality of life. Renters benefit from affordable housing, excellent public services, and a robust economy. The city’s charming streets, historic sites, and diverse culinary scene provide a unique living experience. With top-notch education institutions, numerous parks, and a strong sense of community, Québec City is an ideal choice for those seeking a dynamic and fulfilling lifestyle.
Trois-Rivières, QC
Trois-Rivières, nestled between Montreal and Quebec City, emerges as a top choice for renters in Canada. This historic city, known for its picturesque riverside views and rich cultural scene, offers an appealing blend of affordability and quality of life. Renters in Trois-Rivières enjoy reasonable housing costs, a low unemployment rate, and a vibrant community atmosphere. The city’s well-preserved historic sites, bustling arts community, and excellent educational institutions make it an attractive destination for those seeking a balanced and enriching lifestyle.
Saguenay, QC
Saguenay, located in the stunning Saguenay–Lac-Saint-Jean region of Quebec, is a prime destination for renters seeking affordable living amidst breathtaking natural beauty. Known for its picturesque fjords and vibrant cultural scene, Saguenay offers residents a high quality of life with lower housing costs compared to major urban centers. The city boasts a strong sense of community, excellent recreational opportunities, and a growing economy. For those looking to combine affordability with a rich cultural and natural environment, Saguenay stands out as an ideal choice.
Granby, QC
Granby, nestled in the heart of Quebec’s Eastern Townships, offers renters a delightful blend of small-town charm and ample opportunities. Known for its beautiful parks, vibrant cultural scene, and family-friendly environment, Granby provides an exceptional quality of life. The city’s affordable housing market and strong sense of community make it an attractive option for those seeking a peaceful yet dynamic place to live. With its renowned zoo, bustling downtown, and numerous outdoor activities, Granby is a hidden gem that caters to a diverse range of lifestyles.
Fredericton, NB
Fredericton, the capital city of New Brunswick, offers renters a harmonious blend of historical charm and modern amenities. Known for its vibrant arts scene, beautiful riverfront, and welcoming community, Fredericton provides an excellent quality of life. The city boasts affordable housing options, scenic parks, and a strong educational presence with institutions like the University of New Brunswick. Its rich cultural heritage, coupled with a thriving local economy, makes Fredericton an attractive destination for those seeking a balanced and fulfilling lifestyle.
Saint John, NB
Saint John, New Brunswick’s largest city, is a coastal gem known for its stunning waterfront and rich heritage. Nestled on the Bay of Fundy, it offers renters an affordable cost of living with a unique blend of historic architecture and modern conveniences. The city’s vibrant uptown area is bustling with shops, restaurants, and cultural attractions, while its scenic parks and outdoor spaces provide ample opportunities for recreation. Saint John’s strong sense of community and economic growth make it an inviting place for those looking to enjoy both urban and natural beauty.
Saint-Hyacinthe, QC
Saint-Hyacinthe, located in the Montérégie region of Quebec, is a vibrant city known for its strong agricultural roots and innovative spirit. Often referred to as the “Agricultural Technopolis,” it is home to numerous research centers and educational institutions. Renters in Saint-Hyacinthe benefit from a high quality of life with access to excellent local amenities, including parks, cultural events, and a thriving local food scene. The city’s affordable housing and close-knit community atmosphere make it an attractive option for those seeking a balanced and enriching lifestyle.
Lévis, QC
Lévis, located on the southern shore of the St. Lawrence River across from Quebec City, offers a unique blend of historical charm and modern conveniences. Known for its picturesque views and well-preserved heritage sites, Lévis is a city where history meets contemporary living. Residents enjoy a high quality of life with excellent public services, green spaces, and cultural activities. The city’s affordable housing options and strong sense of community make it a desirable place for renters looking for both tranquility and easy access to urban amenities.
This category looked at factors such as average rent, housing costs, rental availability, and unemployment rates. Québec stood out with 10 cities ranking at the top, demonstrating strong economic stability and affordable housing options, which are critical for renters looking for cost-effective living conditions.
Québec again led the pack in this category, with five cities in the top 10. Ontario followed closely with three cities. British Columbia excelled in walkability, with four cities achieving the highest walk scores, while Caledon topped the list for its extensive green spaces. These factors contribute significantly to the overall quality of life, making these cities attractive for renters.
Victoria, BC, emerged as the leader in this category due to its rich array of restaurants, museums, and educational institutions, offering a vibrant community life. St. John’s, NL, and Vancouver, BC, also ranked highly. Québec City, QC, and Lévis, QC, scored the highest in life satisfaction, reflecting a strong sense of community and well-being. Additionally, Saskatoon, SK, and Oshawa, ON, were noted for having residents with lower stress levels.
For a comprehensive view of the rankings and detailed interactive visuals, you can visit the full study by Point2Homes.
While no city can provide a perfect living experience for every renter, the cities highlighted in this study come remarkably close by excelling in key areas such as housing affordability, quality of life, and community engagement. These findings offer valuable insights for renters seeking the best places to live in Canada in 2024.
