As the baby boom generation ages, members of this group will shift from being “move up buyers” wanting larger homes to “empty nesters” looking to downsize, and in a decade or so, the housing preferences of seniors will be increasingly felt in the market.
Here is an outline of what the housing market in Canada could look like in the coming decades as Canada’s population ages, based on information from the Canada Mortgage and Housing Corporation (CMHC).
Present to 2011 – Move Up Buyers
During these years a desire for larger homes among married couples drives mobility in the real estate market. A single detached home is the ideal for many, although housing costs in larger urban areas may prompt some buyers to opt for townhomes or larger condo units. While mortgage and personal debt is significant, rising incomes among boomers support savings. Home equity lines of credit remain a common option for homeowners.
2011 to 2016 – Empty Nesters
With more and more boomers exiting the labour force, and with family size decreasing as children reach adulthood, downsizing dominates in these years. Aging but active boomers increasingly seek out housing that is more compact, lower maintenance, and closer to amenities. High-end condominiums and one storey homes in established neighbourhoods are popular housing options.
2016 to 2035 – Seniors
Renovated, maintenance-free homes with secondary suites are sought after, and demand for adult lifestyle communities reaches a peak. Living arrangements allowing seniors to live with relatives are popular. However, shelter costs become a greater challenge as more boomers are retirees on a fixed income and draw on other assets. Ownership rates edge lower as some seniors move into rental apartments for greater convenience.
While these are approximate sketches of upcoming trends, there is little doubt that demographic shifts in Canada’s population will have a significant impact on the decisions of homeowners and real estate investors in the years to come.
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