Baby boomers are set to play a key role in Canada’s housing market as they plan to buy but consider their current markets unaffordable.
Royal le Page says that 1.4 million boomers plan to buy over the next five years but 56% believe their local housing market is unaffordable for retirement.
"Don't count them out yet – baby boomers will impact Canada's housing market in a big way in the coming years, as another 1.4 million of this large demographic are expected to sell and buy real estate between now and 2023," said Phil Soper, president and CEO, Royal LePage. "While the wave of older consumers will increase competition for condominium property in particular, there is no single type of home that boomers will be investing in."
The study conducted by Leger found that 59% of retirees plan to renovate their current home rather than buy.
Where the boomers live, plan to live
Over three quarters of respondents own a home, 19% rent, while 1% live with family. Most boomers (61%) nationwide live in a detached home, 21% in condos and 12% in semi-detached/town homes.
Among those planning to purchase a home in the next five years, 45% are most likely to purchase a detached home, 32% prefer a condominium, and 10% noted strongest interest in a semi-detached/town home. Just 5% would opt for a recreational property. Most (51%) boomers are not planning on downsizing.
A minority (10%) plan to buy a secondary property, while 15% plan to sell their primary residence and move into their currently owned secondary property full-time. Nearing or during retirement, nearly one quarter of boomers nationally plan to live in another city (24%) or country (23%) for at least three months of the year.
If they were to make a property purchase, 54% would have a budget of under $450,000, while 25% have a budget of $450,000 or higher.
Helping their kids
Almost half of baby boomers said that they would help fund their children’s home purchases with 41% saying they would contribute less than a quarter of the home’s total value.
"Baby boomers are the most affluent generation in Canadian history, yet the journey has not been without challenge and adversity. Through several difficult economic recessions, the equity in their homes has proven to be wealth bedrock. This is a generation that deeply values home ownership and very much wants their children to have the same opportunity," concluded Soper.