Similar to the residential real estate market, there are many factors contributing to upward price pressure on Canada’s recreational property market, including the ability to continue working
Royal LePage Survey: 3.2 million boomers in Canada considering buying a home within the next five years
Dated: June 30 2021
- 40% of boomer homeowners have at least half of their net wealth in real estate
- 52% of boomer homeowners would prefer to renovate their current property over moving
- 17% of boomer homeowners currently own more than one property
- 64% of boomer homeowners are mortgage-free
- 25% of boomers say they have or would assist a child financially to buy a home
TORONTO, June 30, 2021 – According to a recent Royal LePage survey of boomers in Canada, defined by StatsCan as having been born between 1946 and 1965, 35 per cent of the cohort – or approximately 3.2 million boomers – said they are considering a home purchase within the next five years. Nationally, 45 per cent of respondents believe now is a good time to sell their home.
“The boomer generation appears to have no intention of slowing down,” said Phil Soper, President and CEO, Royal LePage. “Fully vaccinated, and turning a cold shoulder to retirement, the typical member of this huge demographic is enjoying an empty nest and believes real estate is a good investment. Millions of boomers are expected to wade into the market over the next five years.”
Boomer Housing Demand
There is no one-size-fits-all outcome as Canadian boomers age into retirement, especially when it comes to their decision about where to live. More than half (57%) of respondents said they would purchase a detached house if they were to buy, while 19 per cent said they would prefer an apartment/condominium. Fifty-two per cent of boomer homeowners said they would prefer to renovate their existing home rather than purchase another, and an additional 24 per cent said they would consider it.
Of the 35 per cent of boomers who say they are considering purchasing a primary residence in the next five years, 56 per cent say they would consider moving to a rural or recreational region. Twenty-eight per cent say they would consider purchasing a larger home than the one they currently reside in, 56 per cent would consider a similarly-sized property, and 63 per cent would consider downsizing. Respondents were able to choose more than one option. The most popular reason for downsizing is less home maintenance (71%). Other popular choices include the ability to free up money for things like retirement (39%), travel (29%), and to help their children purchase a home (9%).
“Turning full circle to those carefree, pre-children years, most boomers are looking for a home that requires less maintenance,” Soper continued. “Paradoxically, they also yearn for country living and don’t want to sacrifice living space. Look for the continued growth of managed communities in exurban and recreational regions.”
Working boomers largely did not consider their region affordable (65%) and 42 per cent said they would consider a move to a different city, near or during retirement.
Since the onset of the COVID-19 pandemic, more than 550,000 Canadian boomers (6%) have sold their homes or are in the process of selling, and at least 90 per cent said the global health crisis neither caused their plans of moving to be postponed nor expedited.
Homeownership and Personal Wealth
Seventy-five per cent of boomers own their own home, the majority of whom do not currently have a mortgage (64%). Seventeen per cent of boomer homeowners own more than one property, and 40 per cent have at least 50 per cent of their net wealth in real estate.
“The boomer generation strongly values home ownership, for good reason. Real estate has been very, very good to them,” said Soper. “Most are still working and their home equity has become the bedrock of retirement security. Financially confident, their next move is a matter of lifestyle choice.”
Seventy-eight per cent of Canadian boomers believe that home ownership is a good investment.
Boomers keep ‘bank of mom and dad’ open
As home prices continue to grow across the country, many young adults are turning to their boomer parents for help with a down payment on a property. Twenty-five per cent of boomers say they have or would consider gifting or loaning money to a child to help with the purchase of a home. In Vancouver, that figure reaches as high as 34 per cent.
“Over the past year, home values have appreciated sharply in virtually every market from coast to coast. Affordability is a major issue for young Canadians and with stricter mortgage stress test measures in place, they must clear higher hurdles,” Soper said. “Many are turning to the so-called ‘bank of mom and dad’ to achieve the dream of home ownership. The parental bank appears willing, even if it means delaying retirement.”
A recent Royal LePage and Sagen survey of first-time homebuyers in Canada found that 62 per cent of respondents nationwide felt anxious about missing out on a property they wanted because of an insufficient down payment, before buying their first home. That figure increased to 75 per cent in Toronto and 69 per cent in Vancouver.
Seventy-nine per cent of Canadian boomers do not have children living in their home. This includes boomers who are not parents. Seventeen per cent of them have adult children living at home. Seven per cent of those surveyed said they have children aged 18 to 24, and 12 per cent said they have children 25 years of age or older living at home.
Of those who have children living at home, 43 per cent plan to stay in their current property once their kids have moved out. Meanwhile, 21 per cent said they do not foresee their children leaving.
By the end of this decade, all boomers will be 65 or older, which typically coincides with retirement in Canada. Twenty-seven per cent of boomers who are currently working said they would consider delaying retirement to help their children with a down payment on a home.
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Sam Khangura, Broker of Record of Royal LePage Platinum Realty, based in Brampton is a full-time Real Estate Agent/Broker since the year 2000. He has lived in Brampton for over 20 years. During that....
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