Plus, the Right Mortgage For Homeowners Over 55

Since the COVID-19 pandemic left its mark on the Canadian housing market, the real
estate industry has had its watchful eye on what to do next.

The housing market has been strong, and despite a drop in equity market valuations at
the beginning of the pandemic, there’s been a notable turnaround.

Following this period, what surprising demographic should real estate professionals be
thinking about – and how can homeowners make the most of this process?

A recent web seminar titled ‘Riding the Retirement Wave’ featured experts who offered
answers to these questions. The webinar featured Jason Mercer, the Toronto Regional
Real Estate Board’s chief market analyst, and Sue Pimento, the vice president of referred
sales at Home Equity Bank.

Recovery is a Puzzle

In summer 2021, the housing market is strong, and if Mercer is right, it’ll stay that way
for a while.

On the webinar, Mercer explains that housing demand is a puzzle made up of three

  • Long-term population growth
  • High employment rates
  • High or increased income levels

All three factors, he says, are looking good in the near future.

With vaccination numbers increasing, population growth, immigration, and business
recovery are looking better than it has in a long time – and this, Mercer says, will lead to
an increased demand for housing.

On the subject of inflation, Mercer points to where borrowing costs are going.

“The Bank of Canada is laser-focused on inflation and keeping it around the 2% mark

over the long-term,” he said in the webinar.

It is anticipated that the Bank of Canada will raise interest rates, but the stress test will
ensure that homebuyers are approaching the process with a net of safety.

So, how can the real estate industry maximize success from what Mercer and many
others believe will be an uptick in demand? There’s a “trillion-dollar opportunity” with
one particular demographic.

Riding the Retirement Wave

On the webinar, Pimento explained that the current housing market tends to target
first-time buyers and younger groups like millennials – but this, she says, isn’t
necessarily the right way to find success.

Instead, Pimento suggests marketing to those over the age of 55, as there’s home equity
that can be worked with among this group.

“A trillion dollars – that’s how much home equity there is,” she explained, adding that 42
percent of homeowners in Canada are 55 or older.

The CHIP reverse mortgage offers homeowners in this age group the perfect
opportunity to capitalize on success – without having to down-size or compromise

“Everybody has figured out downsizing doesn’t work – not very many people can yield
enough money to retire on, unless they move hours outside of their neighbourhood,”
Pimento explained. “No wonder they don’t want to list their home.”

CHIP is a type of reverse mortgage that allows homeowners to tap into the value of their
home without having to move or sell. This is done using the home’s equity and allows
homeowners to get up to 55 percent of their home’s appraisal value.

Homeowners who take advantage of CHIP may choose to help their children, finance
further purchases, or upgrade their home to increase its sale value.

“It’s simply a mortgage with optional payments,” Pimento said. “It’s a tax-free way of
accessing equity to finance retirement, among other things with very little qualifying

If you’re 55 years of age or older, ask your mortgage broker if CHIP could be right for