By Katie Davis I always heard the term, ``House – Rich, Cash Poor`` but a recent survey conducted by Environics Research for Manulife which polled 2,373 Canadian homeowners between the age of 20 and 59, with a minimum household income of $50,000, shows that this term is here to stay, and not for a good reason.
The results are showing that more than one-third of Canadian households were unable to pay their bills at some point in the past year; this statistic is very disturbing and a sign that rising housing costs are biting into Canadians’ finances. Larger mortgages mean many Canadian homeowners are at risk of retiring House-Rich but Cash- Poor. Many will have to make the difficult choice of retiring later than planned or selling their home and moving into a smaller one to live back within their means.
37% of respondents said they were unable to pay a bill at least once in the past year, little changed from the survey carried out last fall. What is shocking about the data from the survey is related to the amount of mortgage debt the average Canadian mortgage holder carries as it continues to grow, up 3.4% in half a year to $181,000, from $175,000 in the last survey six months ago. The most heavily mortgaged homeowners in the country are in Vancouver, carrying an average debt of $259,000. Homeowners in Calgary and Edmonton were next with an average
of $217,000 in debt. Toronto homeown- ers were third, with $194,000 in debt, on average.
Canadians have set paying off their debts as a
top priority and find a balance between paying off debt and saving for retirement so they don’t end up House-Rich and Cash Poor.
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JUNE 2016 • SPOTLIGHT ON BUSINESS
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