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Seniors Also Feel the Effect of Soaring Interest Rate Hikes

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It's no secret that the Bank of Canada's interest rate hikes that have occurred over the past year have had a significant impact on housing decisions for Canadians. First-time homebuyers have been sidelined in Waterloo Region due to issues of affordability, and homeowners looking to shift into 'move up' homes are cautious due to carrying costs and term renewals for their current mortgages, and these are just a couple examples.
Seniors are also feeling the impact. The decision to sell the family home is often the result of one's ability to maintain and enjoy a larger home while weighing the affordability of a lifestyle move. A few actual examples where seniors are feeling the pinch as a result of higher interest rates include the following:
  1. Mortgage renewal affordability - If a mortgage renewal is in the cards, seniors must also budget for the rate increases. Seniors are often on fixed incomes in their retirement years, and any significant increase in housing costs can have a trickle-down effect on other budgetary considerations.
  2. Cashing in on the family home isn't as lucrative as it once was - Waterloo Region saw some of the highest sale pricing during the height of the pandemic, and cashing in on the family home saw unprecedented windfalls for many seniors. This allowed many to make easy decisions on lifestyle moves with some extra cash in their pockets.
  3. Unaffordable rental options - Often, seniors are not ready to commit to retirement living and instead opt for a rental opportunity in their community. A recent report released this past Summer suggests that you'll need to earn $28/hr to afford the average two-bedroom apartment in Kitchener-Waterloo. This is a challenge for fixed-income seniors who must compete with a slew of other prospective renters in our expensive and highly competitive rental marketplace.
It isn't all doom and gloom for seniors in Kitchener-Waterloo when it comes to home selling and buying decision-making. Typically, seniors in our region are in financially sound positions, and our local housing market inventory is growing for buyers, but sales are still relatively brisk.We are hosting our annual Seniors Seminar at the Waterloo Rec Complex in the Community Pavillion on Thursday, November 23, from 2:00-4:00 p.m. In addition to a comprehensive breakdown of market activity, trends and forecasts, we will have a financial expert on hand to speak about financing opportunities for seniors.If you or someone you know could benefit from knowing their options as they mull a move in their later years, please forward this article their way.