Here’s David Chilton on using home equity as a substitute for retirement savings:
There are too many risks associated with real estate — even in pricey markets like Vancouver — to justify making it the sole element of a retirement plan, the author and personal finance expert says.
“I don’t like it as a strategy at all because what happens is that anytime you have that kind of exponential rise in real estate it almost always ends up going the other way,” says Chilton. His latest book, The Wealthy Barber Returns, was released in September.
“It may not happen here because there’s so much foreign money coming in. But the potential for a significant pullback is still there.”
House price increases even in super-heated markets are likely to become more muted as the tailwind generated by rock-bottom interest rates eases, he says.
Did I just enter Bizzaro World? Aren’t ‘super heated’ markets often at a greater risk of a pullback?