Canadians are withdrawing ever-larger amounts from their registered retirement savings plans to cope with the consistent growth of home prices in the country’s most overheated markets, according to a nationwide survey of 1,500 plan holders.
Released on Tuesday (February 7), the study conducted by Pollara for Bank of Montreal found that on average, Canadians have taken $17,213 from their RRSPs last year.
The online survey, conducted from December 14 to 19 and considered accurate to within 2.5 percentage points (19 times out of 20), revealed the notable increase from the $15,908 average RRSP withdrawal in 2015.
“It’s concerning to see that so many Canadians are dipping into their RRSPs to meet short-term needs, which should only be considered as a last resort,” BMO Wealth Management director of wealth planning publications Chris Buttigieg told the Financial Post.
30 per cent of the respondents mentioned real estate price growth as the main factor driving their decision to dip into their RRSPs.
In B.C., roughly 38 per cent cited housing costs as the leading reason. This is despite the latest update from the Real Estate Board of Greater Vancouver, which stated that the benchmark price for homes (all types) declined by 3.7 per cent over the past half year (down to $896,000).
Respondents from the Atlantic provinces and the Prairies were the only ones who did not cite home purchases as the top reason for withdrawing from their RRSPs. In Atlantic Canada, Canadians too an average of $25,485, with 22 per cent mentioning large purchases other than homes.