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For retirees looking at their home as a source of income, there are three possible routes. ‘One is selling the house outright and freeing up capital. A second option is securing a line of credit, and then the third option is a reverse mortgage.’

Kevin Van Paassen/The Globe and Mail

The problem with being a real estate millionaire in places like Toronto or Vancouver is that so many other people are as well. If you sell your house, pretty much anything you aim to buy in a good location will be comparably expensive. A solution to this problem of trapped wealth: Sell and buy somewhere where the market is calmer.

One young couple sold a Toronto home recently so they could move to Ottawa, where the market is comfortably warm at best. They bought for over $300,000 in Toronto and sold for more than $1-million. Another Toronto couple sold a house in the city for $1.7-million (more than twice what they paid 10 years ago) and are moving two hours north to Collingwood. I visited Owen Sound, about a 2.5-hour drive from Toronto, a few years ago and wrote a column about relocating there in retirement.

One of the interesting things about the Toronto real estate market is that there has been a shortage of houses listed for sale. The most frequent explanation is that gridlock has set in – people don't want to sell because of the cost buying another home. However, an increase in the number of new listings in March suggests more people are looking to cash out.

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Personal finance editor Roma Luciw tells you what you should be doing with your money if you're never going to be a homeowner.
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