More than 1.4 million boomers across Canada expect to buy a home in the next five years
Posted on August 8, 2018
- 56 per cent of boomers consider their local housing market unaffordable for retirement
- 9 per cent of boomer parents do not expect their kids to move out until after the age of 35; this number is almost three times higher in British Columbia
- 32 per cent of boomers looking to buy in the next five years most likely to purchase a condo
TORONTO – The Royal LePage Boomer Trends Survey, released today, found that 17 per cent of Canadian baby boomers (born between 1946-1964) are planning to purchase a new home in the next five years. This is expected to have a meaningful impact on the housing market, as the group represents 1.4 million potential buyers and sellers. The research, conducted by Leger for Royal LePage, found that more than half (59 per cent) are opting to renovate their current residence rather than buying a new home.
“Don’t count them out yet – baby boomers will impact Canada’s housing market in a big way in the coming years, as another 1.4 million of this large demographic are expected to sell and buy real estate between now and 2023,” said Phil Soper, president and CEO, Royal LePage. “While the wave of older consumers will increase competition for condominium property in particular, there is no single type of home that boomers will be investing in.”
“Our research does indicate that smaller cities and recreational areas will attract more investment than major cities,” continued Soper. “This large segment of the population views our big cities as generally unaffordable for retirement purposes.”
The survey found that 44 per cent of respondents across Canada who still have children living at home expect them to move out between the ages of 21 and 25, and 21 per cent expect them to leave between the ages 26 and 30. Eighteen per cent anticipate their children will move out after the age of 30, with 9 per cent expecting them to depart after the age of 35. This percentage nearly triples in British Columbia, where 24 per cent of respondents with children living at home expect their children to move out after the age of 35. According to Royal LePage’s Peak Millennial Survey conducted last year, 14 per cent of Peak Millennials surveyed are living with their parents.
“Our 2017 research into the largest group of first time home buyers in Canada, which we call the Peak Millennials, showed many were roosting in the family nest well beyond the traditional age of exit,” Soper said. “With this work, we have confirmed that boomers are allowing children to reside at home well into adulthood. Yet they won’t stay forever, and when they go, the folks are going condo shopping.”
Currently across Canada, according to the survey, over three quarters (77 per cent) of boomers own a home, nearly one in five (19 per cent) rent, while a very small number (1 per cent) live with family. When zooming in on current dwellings, the largest number (61 per cent) of boomers across Canada live in a detached home, followed by condominiums (21 per cent) and semi-detached/town homes (12 per cent). Of boomer respondents planning to purchase a home in the next five years, 45 per cent are most likely to purchase a detached home, 32 per cent are most likely to purchase a condominium, while 10 per cent noted strongest interest in a semi-detached/town home and 5 per cent said a recreational property.
Retirement Plans and Perceptions on Housing Affordability
When asked about plans nearing or during retirement, one in five (20 per cent) boomers intend on buying a new property, while 71 per cent do not plan on buying a new home. Respondent sentiments were mixed on the desire to downsize, with less than half (41 per cent) stating that they would seek a smaller dwelling in retirement, while just over half (52 per cent) have no intention of downsizing.
Considering recent home price increases in several Canadian markets, more than half (56 per cent) of boomers polled said they consider the housing market in their city or region to be unaffordable. This number jumps to 78 per cent and 63 per cent of respondents in British Columbia and Ontario, respectively. When asked about their willingness to relocate, over one-third (34 per cent) of respondents nationally stated that they are open to moving to another city or suburb where property prices are more affordable. Of respondents willing to move for improved affordability, 35 per cent would prefer to stay within one hour of their current residence, 30 per cent would be willing to venture further out (one hour or more away), while 20 per cent stated that they are open to living anywhere.
A minority of respondents plan to purchase or reside in a secondary home or live elsewhere for portions of the year. Ten per cent plan to buy a secondary property, while 15 per cent plan to sell their primary residence and move into their currently owned secondary property full-time. Nearing or during retirement, nearly one quarter of boomers nationally plan to live in another city (24 per cent) or country (23 per cent) for at least three months of the year.
For the entire announcement, please click here.