Real Estate_Residential_House

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).

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Additional properties

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.

Read: Younger Canadians prefer urban living

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.

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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.”

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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
National $1,489,400 58 15 $176,000 36 $708,500 47
Quebec $678,600 47 20 $95,800 39 $477,100 50
Ontario $1,787,900 56 15 $231,500 27 $1,170,200 40
Alberta $719,500 70 14 $199,200 44 $642,600 33
B.C. $3,908,200 67 13 $236,100 44 $634,100 67

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Originally published on Advisor.ca

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