Desired lifestyle plays a big role in homebuying decisions, and our desired lifestyle tends to shift as we get older. The Royal LePage Boomer Trends Survey, released this month, seems to support that premise: It found that 17 per cent of Canadian Baby Boomers (born between 1946 to 1964) plan to purchase a new home in the next five years.
“Baby Boomers will impact Canada’s housing market in a big way in the coming years,” says Phil Soper, president and CEO, Royal LePage. “Another 1.4 million of this large demographic are expected to sell and buy real estate between now and 2023.”
REAL ESTATE FUNDING RETIREMENT
Affordability is an issue for Boomers in BC, where they are banking on real estate to fund their retirement. Seventy per cent of British Columbians between the ages of 54 and 72 own their home, the lowest percentage among all regions surveyed. And of the respondents who own their home, 26 per cent say more than half of their retirement savings are tied to real estate – the highest rate of all provinces.
With so many Boomers relying on their homes to fund their retirement, 43 per cent say they are planning to eventually downsize their principal residence and almost half (42 per cent) will consider purchasing a condominium for their next home. Thirty-seven per cent will be willing to move to a new area in search of affordability.
“More and more we’re seeing Baby Boomers in British Columbia downsizing from a detached home to a condominium,” says Michael Trites, managing broker, Royal LePage Northstar Realty. “Increasingly they are transitioning into condos to unlock some of the equity they have built up in their homes, while gaining more flexibility as their health and lifestyle preferences change.”
CHILDREN LIVING AT HOME
A vast majority (88 per cent) of Boomers in BC believe that real estate is a good investment, and 42 per cent of respondents with children say they would be willing to subsidize the purchase of their children’s homes.
The survey found 44 per cent of respondents across Canada with children living at home expect them to move out between the ages of 21 and 25; 21 per cent expect to leave between the ages 26 and 30; 18 per cent anticipate their children will move out after the age of 30; and nine per cent expect them out after the age of 35. This last number nearly triples in BC, where 24 per cent of respondents with children living at home expect them to move out after the age of 35.
“Our 2017 research into the largest group of first-time homebuyers in Canada, which we call the Peak Millennials, showed many were roosting in the family nest well beyond the traditional age of exit,” says Soper of Royal LePage’s Peak Millennial Survey, which showed 14 per cent of Peak Millennials surveyed are living with their parents.
“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.”
TYPES OF HOMES
Currently across Canada, according to the survey, more than three quarters (77 per cent) of Boomers own a home, nearly one in five (19 per cent) rent, while a very small number (one 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/townhomes (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, 10 per cent note the strongest interest in a semi-detached/townhome and five per cent say a recreational property.
“Our research does indicate that smaller cities and recreational areas will attract more investment than major cities,” continues Soper. “This large segment of the population views our big cities as generally unaffordable for retirement purposes.”
More than half (56 per cent) of Boomers polled nationally say they consider the housing market in their city or region to be unaffordable. This number jumps to 78 per cent of respondents in British Columbia.
When asked about their willingness to relocate, more than one-third (34 per cent) of respondents nationally stated 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 prefer to stay within one hour of their current residence, 30 per cent are willing to venture further out (one hour or more away), while 20 per cent say that they are open to living anywhere.