A growing number of expatriate Winnipeggers are winning the lottery these days, but their tickets to new-found wealth aren’t bought at a kiosk — they’re living in it.
Those “lucky” enough to have moved to Toronto, Vancouver and, especially, Calgary about a decade ago have experienced unprecedented gains in their local real estate markets, and many of them have decided to come home. Their houses represent the biggest financial windfall they might ever experience.
After years of Manitoba’s best and brightest seeking out opportunities elsewhere, the trend appears to be changing. Finally. This group is selling, monetizing their gains in the red-hot markets, moving back to Winnipeg with a suitcase full of money and, in many cases, buying new houses — and sometimes a cottage, too — with cash.
For some, the emotional pull of their children’s grandparents is a major factor. For others, the lustre of the major metropolises has worn off. Others simply want to rid themselves of their mortgages.
Think about it for a second: no more mortgage payments. And all you have to do is go home. Your commute is automatically a fraction of what it once was, which will significantly reduce the amount of gasoline you go through, you can upgrade your neighbourhood and increase the number of school choices you have for your children.
Making the jump to mortgage-free has other benefits as well. That increased cash flow can facilitate regular winter holidays without putting a huge dent in your budget. Or one parent can stay home with newborns and young children and avoid the many pitfalls of putting them in daycare.
This isn’t to say Winnipeg’s housing market has been falling down an elevator shaft of late. This year is projected to be the fifth consecutive year of double-digit price growth, an unprecedented streak in the more than 100-year history of the Winnipeg Real Estate Board. But that’s small potatoes when compared with Calgary, where properties have risen 45% in value since the beginning of 2006 alone. The average price of a home in Calgary is $420,807 today, up from $209,941 five years ago and from $146,250 10 years ago. The average house price in Winnipeg, meanwhile, is projected to top $170,000 by the end of the year.
Scott Stewart, an investment advisor at ScotiaMcLeod Inc. in Winnipeg, says moving back home from a more expensive market makes financial sense. A $250,000 mortgage amortized over a quarter-century with monthly payments at 6% will work out to about $480,000 in total by the time you pay it off. “It’s a double whammy,” he says — on the positive side. “You’re not paying the interest on your mortgage and you’re earning money on your investments. Instead of paying 7%, you could be making 7%. That’s a 14% swing.”
If you sell off your house in one of the overheated markets and move back to the ’Peg, you’ll be sitting pretty, he says. If you take the approximately $19,000 in annual mortgage payments that you were making before your move and invest them conservatively at 6% — the long-term returns of the Toronto Stock Exchange are around 10% — you’d have more than $1,050,000 after 25 years.
“It’s crazy,” he says. “Move back home from Calgary, and you could very easily be a millionaire in your retirement.” IE
Cashing in on moving home
Ex-pat Winnipeggers are selling their houses in red-hot markets and buying at home with cash
- By: Geoff Kirbyson
- July 31, 2007 October 29, 2019
- 11:58
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