Friday, April 07, 2006

Housing and Investment Market. What to do?

90% of Canadians have virtually no retirement savings, although they may own a house. It’s hard to make the decision to downsize your real estate and give up that trophy house.

The bulk of net worth of average Canadian families now sits in residential real estate. The housing market is at high tide, with prices currently higher than every before. And while some will tell you real estate values will go up forever, history says otherwise. Just imagine, if nothing changes, what will happen in 10 years when nine million Boomers figure they’d better sell the house because they have no financial assets to live on, and no pension.

Real Estate is the cornerstone of personal financial wealth. It’s a solid and investment and you need a place to live. But you also need cash, and – most importantly – an income stream in retirement. That might come from an apartment building or a portfolio of rental properties, but not everyone wants to be a hands-on landlord or tie that much capital up in just one asset class (or enjoy fixing toilets).

What is your plan?


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