Canada's Condominium Magazine

Baby Boomers’ Investments in Residential Real Estate Outperforming Other Financial Investments

According to a recent report by Mustel Group and Sotheby’s International Realty Canada, residential real estate investments rank high amongst Canada’s urban baby boomers. Approximately 61 per cent of baby boomers in Canada’s largest metropolitan areas (Vancouver, Calgary, Toronto, and Montreal) had real estate investments which outperformed other financial assets such as stocks and bonds.

Urban baby boomers’ confidence in investments tends to vary by location. According to the Canadian report on generational trends, Intergenerational Wealth Transfer & Next Generation Home Buyers, 47 per cent of baby boomers in the four top metropolitan areas anticipate real estate gains to exceed their financial investments over the next five years, while 28 per cent expect on par performance.

The Canadian Real Estate Association released data showing that the average price for a single-family home in Greater Vancouver in December 2017 was approximately $1.6 million, an increase of 76 per cent from five years earlier. This is a stark contrast to Calgary, whose single-family homes reached an average of $478,300, up 13 per cent from five years earlier. In the Greater Toronto Area, the average price rose 64 per cent to $855,900, while Greater Montreal’s averaged $347,700, an increase of 15 per cent.

The report also revealed that 57 per cent of baby boomers felt that purchasing real estate within their city was a smart investment, while 74 per cent stated that they would recommend real estate investments to the next generation of Canadian homebuyers. Sotheby’s International Realty Canada anticipates that the next generation of homebuyers will following their parents’ lead and opt for residential real estate purchases and investments.

“For many generations of Canadians, home ownership has been fundamental to long-term financial planning, security, and wealth creation, even as local real estate markets have fluctuated in the short-term,” said Sotheby’s International President and CEO Brad Henderson.

“It’s no surprise that baby boomers remain bullish about real estate in spite of recent headwinds that have introduced new uncertainty into the Canadian real estate market, and in light of record performances by U.S. stock indexes in the past year. We expect this generation to influence the next and to actively help their children invest in real estate at levels that will likely surpass their involvement in other financial investments.”

The intergenerational transfer of wealth is well underway, as one-third of baby boomers have stated that they plan to give a living inheritance to the next generation in their family, opting to assist them in purchasing real estate. Approximately 12 per cent of this group has already given an inheritance or otherwise transferred funds to a beneficiary or an account set up in the beneficiary’s name. Baby boomers not opting to provide living inheritances plan to instead bestow such gifts to relatives in their will.


Auberge on the Park-Tridel


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