Canada's Condominium Magazine
Demographics is an irresistible force. Baby boomers, a massive cohort of the population, are getting set to retire. Not surprisingly, they intend to downsize, now that the nest is empty. But is the nest empty? And how do they downsize?
46% of baby boomers are considering downsizing to a condo, selling and moving out of larger family-sized homes, according to a statistically significant new Leger survey (accurate to within 3%, 19 times out of 20), commissioned by Royal LePage.
Such a massive cohort of the population selling family homes will have a significant impact on the market — likely driving up condo prices — especially larger condos with luxury features and condos in suburban areas — while reducing price pressure on single-family detached homes as inventory climbs. Royal Lepage CEO Phil Soper said:
“So we’ll see building and pressure on the price of condos and in more remote suburbs of our big cities.”
Critically, for market forecasting, 17% of respondents indicated they would sell their homes by 2023. Nationally, this represents 1.6 million people (total boomer population estimated by Statscan is 9.6 million.)
The survey found that amongst Ontario respondents 54 to 72 years-of-age:
- 46% are considering downsizing to a condo
- 32% have specifically targeted downsizing to a condo
- 45% of Ontario boomers planned to pay less than $450,000 (19% budgeted less than $250,000)
- 40% indicated they would be willing to move to a new community in search of affordable housing
- 51% expect their children to leave home by 25, 17% by 30
- 9% of respondents (Nationally) expected the adult children to stay at home up to 35 years
- 50% of Ontario respondents (47% of national respondents) said they would likely help their children buy their first home, contributing up to 25% of the cost
This runs contrary to a similar poll of baby boomers from Royal Lepage in 2013 (before the market became volatile in the GTA), where the majority or respondents indicated they intended to stay in the family home for retirement. The main variable between the polls would be age (boomers are older) and the prices in the market. The poll sample was 1,000 Canadians, born between 1946 and 1964 and took place in July of 2018.
Nest still full?
According to the survey, for the first time, eighteen per cent of baby boomers don’t expect their children to leave the nest until at lest thirty-years-of-age — mostly millennial adult children. Typically, in the past, it has been the early twenties. Some leave the nest much later than 30. Of course, adult children is an obstacle to down-sizing — although putting the home on the market may force the nestlings to fly the nest.
Many responded that they are considering recreational and touristy locations for resettling. Another sizable number of baby boomers are renovating the family home, expecting the adult children to stay at home; many, are helping finance their children’s first home purchase.
“For boomers it’s not putting in hand rails and non-slip surfaces — they’re not quite that old,” Royal Lepage CEO Soper said. “The renovations are probably quality-of-life based, as opposed to accommodation for physical ailments.” Soper is himeslef a baby boomer.
Condos are a top choice for downsizing as baby boomers enter retirement due to low maintenance and accessibility to important services such as healthcare. Others in the survey identified their target as rural locations like Collingwood, Orangeville, Haliburton and rural areas in Quebec and Ottawa-area.