Real Estate Talk:
Downsizing explained
When to consider downsizing and the options available
By Joseph Marovitch
August 14, 2025
My children moved out just before the pandemic. However, during the pandemic, when COVID was at its worst, my wife and I suggested they move back home until the situation subsides. Both our kids moved back home. Being in their late 20s, it was a bit of a challenge, and after three years, as the pandemic subsided, they decided to move out. As soon as they did, my wife Tracey and I decided to sell the 3-bedroom house and find something smaller.
We did this for several reasons. First, our kids were older and ready to go out on their own. Second, we no longer required so much space or expense, and third, we intended to travel, so we chose the condo option. A condo has much less maintenance, does not require an alarm system as there is security and a doorman, and permits us to come and go as we please without having to worry about the issues that come with a single house. The last reason is that a condo is so much easier to live in than a house.
I have been told by several clients, who have lived in their home for over 15 to 20 years, that they are considering downsizing but are unsure about the process and where to go next.
If you are an empty nester, as we are, I have been told by several clients, who have lived in their home for over 15 to 20 years, that they are considering downsizing but are unsure about the process and where to go next.
There are several options as to where one can move. Here are three main options to consider:
SMALLER HOME
Advantages
- Less maintenance
- Good long-term investment
- Can be refinanced if funds are required.
- Eligible for a reverse mortgage if funds are required.
- It can be passed on to the children.
Disadvantages
- Work and maintenance are required.
- Security required, eg; alarm system
- No protection against rising inflation and interest rates
CONDOMINIUM
Advantages
- No ground or building maintenance
- Options: doorman, 24 hr security, indoor parking, pool, gym
- Can be refinanced if funds are required
- Eligible for a reverse mortgage if funds are required
- Can be passed on to the children
Disadvantages
- Condo fees – though condo fees cover expenses one would pay with a single home, except that the owner does not do the maintenance.
- All repairs and upgrades are a joint decision by all the owners.
- If the condo is an undivided co-ownership:
All the owners share the mortgage.
A minimum 20% down payment is required.
The owner owns a percentage of the building, not their specific unit.
Other owners sometimes have the right of first refusal if the owner wants to sell, as an offer. The 72-hour right of first refusal must be placed in the Centris listing and can deter buyers from visiting.
Other owners can, if the rule is in the declaration of co-ownership, refuse a seller’s buyer.
‘If one is young, starting their life and has a job, it would be wise to have money work for them as young as possible and therefore purchase, rather than rent. If one is older and near or in retirement, renting can be an excellent idea, as the funds can be used to live comfortably in retirement.’
RENTING
Advantages
- More equity in your pocket if you sold your house.
- Funds can be used for retirement.
- No municipal tax to pay.
- No school tax to pay.
- The landlord repairs normal wear and tear issues.
- A legacy renter is a tenant who, if they meet the following criteria, is protected from eviction:
Is 70 years of age or older
Has lived in the unit for a minimum of ten years
Has an income equal to or less than the maximum threshold for low-rent housing
Disadvantages
- Not an investment
- Rent paid is rent money gone.
Rent is money people work for, whereas in home ownership, money works for people. Every rent payment is money gone. Every mortgage payment is money invested as the mortgage is paid off, and the value grows.
If one is young, starting their life and has a job, it would be wise to have money work for them as young as possible and therefore purchase, rather than rent. If one is older and near or in retirement, renting can be an excellent idea, as the funds can be used to live comfortably in retirement.
The information in these articles is a summary. Should you have questions, comments or wish to discuss further, please refer to the comments section at the bottom of the page or contact me directly. As well, to view past articles, click here.
Next article: The perfect property
State of the market
According to a recently published report from RBC Economics, Canada’s housing market has encountered many challenges in 2024 and 2025. Foremost among these challenges is the international trade tariff war initiated by the U.S. and geopolitical events as affected by U.S. policies and diplomacy. RBC Economics projects home resales across Canada will decline by 3.5% in 2025.
However, there is good news. The report forecasts a 7.9% increase in sales for 2026 and further improvement in 2027. Negative market effects from the pandemic appear to have subsided. Consumer confidence in Canada’s real estate market has improved due to rate cuts, and the market appears to favour buyers at this time.
‘Buyers require strategies to protect their future assets, and sellers must consider all factors prior to selling.’
Nothing in the report is for certain. U.S. policies are uncertain and constantly changing, thereby leaving businesses and consumers off balance as to further investment, even though borrowing costs are down. There are no solutions yet for the Middle East and European conflict, which affects every world market.
At present, the real estate market is improving, and all current signs provide encouragement and confidence. However, buyers require strategies to protect their future assets, and sellers must consider all factors prior to selling.
Have a great week!
Let’s not forget that people with cancer are vulnerable too!
You are invited to keep giving to the following organizations since it’s now more important than ever to support cancer research! Click on the logos below to find out how:
Image: SHVETS production – Pexels
Other articles by Joseph Marovitch
Other recent articles
