Baby boomers are about to impact the condo market in a big way, according to the results of the Royal LePage Boomer Trends Survey, conducted by Leger.
There are 1.4 million baby boomers across Canada looking to buy a home in the next five years. 56% consider their local housing market unaffordable for retirement, and 32% are most likely going to buy a condo. A larger share of 45% plan to buy a detached home, and 10% plan to live in a semi or townhome; 5% are considering a recreational property.
While boomers will significantly affect the housing market in the coming years, 59% are planning to renovate instead of buying another home. 77% of boomers own a home, while 19% rent and 1% are living with family. 61% live in detached homes, 21% in condos, and 12% in semis and townhomes.
A boomer’s plans could be thrown off by how long their children continue living with them. 44% expect their children to move out sometime between the ages of 21 and 25 years old. 21% think their kids will stick around until 26 to 30. 18% expect the little ones to hit the road after 30, and a sad 9% think they’ll have a full nest until their kids are over 35!
Last year, the Peak Millennial Survey found that 14% of millennials are living with their parents. “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 Phil Soper, president and CEO, Royal LePage. “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.”
Zeroing in on Ontario, the influx of condo hunters probably doesn’t bode well for millennials. In Ontario, 46% of boomers are considering buying a condo, and with most young buyers also targeting the relatively most affordable housing type, supply could struggle to keep up…which means prices may rise.
Out of all the regions surveyed across Canada, Ontario has the highest number of boomers looking to downsize (49%). 80% of Ontario boomers own their home and 20% plan to buy in the next five years.
“Boomers in Ontario are looking to reduce expenses as they approach retirement,” says Caroline Baile, broker, Royal LePage Your Community Realty. “By downsizing to a condo or moving to a more affordable city, boomers are able to tap into the equity in their homes and have more certainty about their costs. They are looking to transition into a lifestyle that gives them more freedom to pursue other activities without having to deal with time-consuming upkeep and unexpected repairs.”
According to the Building Industry and Land Development Association’s latest new home statistics for June 2018, the average price of a new condo in the Greater Toronto Area was $774,554. Clearly, condos are already too pricey for some millennial buyers. Over the next five years as affluent boomers move into the market, expect condo demand to remain strong.
There is one piece of good news for millennials; 50% of boomers in Ontario said they would gift money to their children to go towards a home purchase. If it’s come to that, you have a 50-50 shot! Here’s to hoping you don’t have to take it.