Wealthy Canadians’ primary residences are currently worth upwards of $1.5 million, on average, according to a new study by BMO Private Banking.
And, nearly all of those surveyed (95%) own their residences, versus renting. Out of those who own homes, adds the survey, 58% say they’ve paid off their mortgages, while the rest have between $95,000 and $250,000 to pay back (see table below).
The study finds more than one third (36%) of wealthy Canadians own second properties—of that group, 40% own two or more houses. The average value of these properties is $708,539.
The top reasons for owning an additional property include:
- having a home for vacation purposes (47%);
- using the home as an investment (39%);
- using the home as income-generating property (36%);
- having something to pass on to future generations (28%); and
- having a potential retirement home (12%).
Among those who own additional property, 80% own one in Canada, while 27% own in the U.S., 11% own in Europe, and 8% own in Central America, South America or the Caribbean. Aside from that, 7% own in Mexico or Asia, and 5% own in Australia.
When buying abroad, “having the financing already in place puts more control into the hands of the buyer,” suggests Craig Downey, vice-president and managing director of Platinum Banking at BMO Private Banking. “[Clients] can avoid being subject to [foreign] financing conditions.”
Regional survey breakdown
|Region||Average value of primary residence||% who have paid off mortgage||% who have mortgage||Average value of mortgage debt||% who own a second property||Average value of second property||% top reason for having a second property for vacation purposes|