To sell or not to sell? Hot housing market makes it a tough decision for many Canadians: CIBC Poll

Many homeowners aged 55+ want to cash out, while some millennial owners are feeling buyers' remorse

TORONTO, April 10, 2017 /CNW/ - A new poll by CIBC (CM:TSX) (CM:NYSE) finds that while two in five Canadian homeowners with plans to sell their home are inclined to cash in and reap a profit amid continued strong housing prices, as many as two-thirds (62 per cent) are reluctant to sell due to the high price tag of buying another home.

"In today's market, homeowners are facing a conundrum as to whether to buy, sell or stay put," says David Nicholson, Vice-President, CIBC Imperial Service. "Buying or selling your home is one of the biggest decisions you'll make. That's why it's important to make the decision for the right personal and financial reasons and see past the noise in the marketplace. Evaluating the pros and cons as part of an overall financial plan can help you decide what's best for you."

Key poll findings:

  • 41 per cent of Canadian homeowners with plans to sell say they are more inclined to cash in and 'sell to reap a profit.'
  • 62 per cent planning to sell say high price tag of buying another house is making them 'reluctant to sell' their current home.
  • 54 per cent of all Canadians surveyed expect housing prices will continue to rise, and 40 per cent think housing prices will drop in the next five years.
  • 73 per cent of homeowners will one day sell their home, including 25 per cent who plan to sell within the next five years.
  • Nearly half (48 per cent) of homeowners, who are planning to sell, are concerned that government tax and policy changes will lower housing prices, and 28 per cent think that renting is a 'better option' given current house prices.

Boomers look to downsize

The poll also finds that as many as two-thirds (67 per cent) of baby boomers (aged 55+) plan to sell their homes with the top reason being to downsize to a smaller home, condo or nursing/retirement home (63 per cent). Financially, boomers say they're motivated to sell to boost their retirement savings or take advantage of high home prices, yet the high cost of buying again is also making them reluctant to sell their current home.

"Your home is where your heart is, but it's also likely your biggest financial asset, so there is a lot to consider as you enter or near retirement that can affect your decision to sell or not," says Mr. Nicholson. "It's important to determine what income you'll need in retirement to live the life you want and prepare for the unexpected."

For some, the dream of retiring by the water can sometimes be eclipsed by the reality of needing to be closer to family or medical services, which may in turn come with a higher price tag in today's market, he adds.

Buyer's remorse for cash-poor millennials

The poll also finds more than one-third (39 per cent) of millennials (aged 18-34) have made the leap into homeownership. The remainder (61 per cent) either rent or live with their parents/family, of which as many as 23 per cent believe they will never own a home and an almost equal number (29 per cent) aren't sure if home ownership is in their future.

Of millennials owning homes, the vast majority (81 per cent) plan to sell, citing these reasons:

  • 63 per cent say mortgage and housing costs are making them cash poor.
  • 57 per cent fret that rising interest rates will make it harder for them to meet their mortgage payments.
  • 36 per cent feel that renting is the 'better option.'

Still, as many as two-in-five millennial homeowners with plans to sell (43 per cent) will upsize to a larger home.

"It's important to choose the house and mortgage that you can afford so that you can manage your cashflow and won't end up with buyer's remorse," says Mr. Nicholson. "A house can represent so much – a new start, independence, putting down roots, starting a family or building wealth. But, it's important to evaluate the pros and cons and crunch the numbers so it's the right decision for today and tomorrow."

Tips to selling your home:

  1. Don't try to time the market
  2. Estimate how much selling your home will cost you
  3. Know where you're going to live next and how you will fund it
  4. Aim to sell at top-dollar by taking care of any repairs and clearing away clutter
  5. Talk to a financial expert and have a plan in place to invest sales proceeds

KEY POLL FINDINGS:

Canadians who own, rent or live with parents/family/other:


All Canadians

Aged 18-34

Own

62 %

38 %

Rent

31 %

42 %

Live with parents/family/other

7 %

19 %

When, if ever, Canadian homeowners will sell their home:


All Canadians

Aged 18-34

Aged 35-54

Aged 55+

0-5 years

25 %

34 %

22 %

23 %

5-10 years

21 %

26 %

19 %

21 %

More than 10 years

19%

11%

24 %

19%

More than 20 years

9 %

10 %

12 %

5 %

Never, I don't plan to sell my home

27 %

19 %

24 %

33 %

Top three financial reasons Canadians plan to sell their homes:


All Canadians

Aged 18-34

Aged 35-54

Aged 55+

To invest in another or larger home

23 %

46 %

24 %

9 %

To cash out on the high price of my home before prices fall

22 %

21 %

22 %

23 %

I need the money to help finance my retirement

21 %

10 %

21 %

26 %

Canadians believe housing prices will drop in:

Less than 1 year

4 %

1-2 years

16 %

3- 5 years

20%

6-9 years

4 %

10 years

2 %

Never, housing prices will continue to rise

54 %

CIBC Home Buying & Selling Poll Disclaimer:
From March 16th to March 20th 2017 an online survey was conducted among 3,034 randomly selected Canadian adults who are Angus Reid Forum panelists. The margin of error—which measures sampling variability—is +/- 1.7%, 19 times out of 20. The results have been statistically weighted according to education, age, gender and region (and in Quebec, language) Census data to ensure a sample representative of the entire adult population of Canada. Discrepancies in or between totals are due to rounding.

About CIBC
CIBC is a leading Canadian-based global financial institution with 11 million personal banking and business clients. Through our three major business units - Retail and Business Banking, Wealth Management and Capital Markets - CIBC offers a full range of products and services through its comprehensive electronic banking network, branches and offices across Canada with offices in the United States and around the world. Ongoing news releases and more information about CIBC can be found at www.cibc.com/ca/media-centre/ or by following on LinkedIn (www.linkedin.com/company/cibc), Twitter @CIBC, Facebook (www.facebook.com/CIBC) and Instagram @CIBCNow.

SOURCE CIBC - Consumer Research and Advice

For further information: Caroline Van Hasselt, Director, Public Relations, 416-784-6699 or caroline.vanhasselt@cibc.com

RELATED LINKS
http://www.cibc.com

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