{"id":10060,"date":"2018-08-15T11:11:05","date_gmt":"2018-08-15T18:11:05","guid":{"rendered":"http:\/\/www.roryc.ca\/blog\/?p=10060"},"modified":"2018-08-09T11:00:25","modified_gmt":"2018-08-09T18:00:25","slug":"baby-boomers-are-back-in-the-housing-market-and-it-will-impact-prices","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2018\/08\/baby-boomers-are-back-in-the-housing-market-and-it-will-impact-prices\/","title":{"rendered":"Baby Boomers Are Back in the Housing Market &#8211; and It will Impact Prices"},"content":{"rendered":"<p style=\"text-align: justify;\">More than 1.4 million Canadians between the ages of 54 and 72 expect to buy a house in the next five years, according to a new survey by real estate powerhouse Royal LePage.<\/p>\n<p style=\"text-align: justify;\">Boomers will be either downsizing to smaller properties in their hometowns or looking for greener \u2014 and cheaper \u2014 pastures away from big cities, the research shows.<\/p>\n<p style=\"text-align: justify;\">Either way, this is \u201cexpected to have a meaningful impact on the housing market,\u201d the report reads.<\/p>\n<p style=\"text-align: justify;\">Canada\u2019s housing market has already been through a boom, bust and echo, said Royal LePage president and CEO Phil Soper, quoting the 1990s bestselling book Boom, Bust and Echo by Canadian demographer David Foot.<\/p>\n<p style=\"text-align: justify;\">The boom happened when boomers entered the market as first-time homeowners and then upgraded to larger homes a few years later. The bust had, in part, to do with the smaller number of gen-X homebuyers. The echo kicked in when millennials, the children of the boomers, started looking for a home of their own, Soper said.<\/p>\n<p style=\"text-align: justify;\">Now we may be in another real estate market commotion caused by boomers, as Canadians in or approaching retirement look for homes better suited to life after work.<\/p>\n<p style=\"text-align: justify;\"><strong>Less pressure on detached-home prices, more pressure on condo prices<\/strong><\/p>\n<p style=\"text-align: justify;\">In terms of home prices, \u201cI think that there will be some relief from boomers leaving family-sized homes,\u201d Soper said.<\/p>\n<p style=\"text-align: justify;\">The main beneficiaries will likely be first-time homebuyers who are at the tail end of the millennial cohort and the much smaller generation Z. Downsizing boomers will also likely leave more space for older millennials who already own a house but are a looking to move to a bigger home as their families grow.<\/p>\n<p style=\"text-align: justify;\">Still, with demand for housing expected to remain, the boomer migration to condos and small-town Canada won\u2019t be the solution to housing affordability woes, Soper warned.<\/p>\n<p style=\"text-align: justify;\">\u201cIt will bring some relief, but not enough for (home) prices to retract,\u201d he said.<\/p>\n<p style=\"text-align: justify;\">And when it comes to smaller homes and condos, downsizing boomers often become competition for young families and immigrants, helping to push prices up.<\/p>\n<p style=\"text-align: justify;\">\u201cThe price appreciation curves for condos and detached homes in places like Toronto have flipped over the last couple of years,\u201d Soper said, meaning that apartment units have been appreciating faster than single-family houses.<\/p>\n<p style=\"text-align: justify;\">In particular, boomers could push up the prices of larger condos, Soper added.<\/p>\n<p style=\"text-align: justify;\">This would add to price pressures generated by the stricter federal mortgage rules that came into effect this year. These rules also contributed to pushing more homebuyers toward less expensive properties like condos.<\/p>\n<p style=\"text-align: justify;\"><strong>Smaller towns<\/strong><\/p>\n<p style=\"text-align: justify;\">But not all boomers are prepared to spend their golden years in an apartment.<\/p>\n<p style=\"text-align: justify;\">A whopping 56% of those surveyed consider their local housing market unaffordable, a percentage that grows to 63% in Ontario and 78% in British Columbia. However, the solution for many isn\u2019t to stay put and downsize but to move away.<\/p>\n<p style=\"text-align: justify;\">\u201cOur research does indicate that smaller cities and recreational areas will attract more investment than major cities,\u201d Soper said in a statement.<\/p>\n<p style=\"text-align: justify;\">Smaller towns with picturesque landscapes and recreational amenities will likely be the destination of choice, Soper said. He cited Collingwood, Ont., White Rock, BC, Saskatoon and Mt. Tremblant, Que., as examples.<\/p>\n<p style=\"text-align: justify;\"><strong>Not yet empty nesters<\/strong><\/p>\n<p style=\"text-align: justify;\">But boomers are likely to postpone their home purchases until the family nest is empty. The survey found that 44% of respondents still have children living with them. Of those, almost 20% don\u2019t anticipate the kids will move out until after the age of 30, while nearly 10% expect them to leave after the age of 35.<\/p>\n<p style=\"text-align: justify;\">Perhaps partly in an effort to make that transition happen, 47% of boomers say they are ready to help their children buy their first home, with 5% willing to contribute 25% or more of the home purchase price.<\/p>\n<p style=\"text-align: justify;\">Baby boomers are the \u201cmost affluent generation in Canadian history\u201d and they are willing to give back, Soper noted.<\/p>\n<p style=\"text-align: justify;\">\u201cThis is a generation that deeply values home ownership and very much wants their children to have the same opportunity.\u201d<\/p>\n<p style=\"text-align: justify;\">Leger conducted an online poll of 1,000 Canadian baby boomers between the ages of 54-72 between July 12 and July 17, 2018. The survey has a margin of error of +\/-3.0%, or 19 times out of 20.<\/p>\n<p style=\"text-align: justify;\"><strong>Regional Breakdown<\/strong><\/p>\n<p style=\"text-align: justify;\">Here\u2019s the share of boomers who expect to buy a house in the next five years and the percentage of those who plan on helping their children buy a house.<\/p>\n<p style=\"text-align: justify;\">Share of boomers planning on buying a new home within five years<\/p>\n<p style=\"text-align: justify;\">NATIONAL : 17%<br \/>\nBC : 17%<br \/>\nAB : 19%<br \/>\nSK\/MB : 27%<br \/>\nON : 20%<br \/>\nQC : 11%<br \/>\nATLANTIC CANADA : 13%<\/p>\n<p style=\"text-align: justify;\">Share of boomer willing to help their kids buy a house<\/p>\n<p style=\"text-align: justify;\">Willing to subsidize their child\u2019s home purchase to some extent :<\/p>\n<p style=\"text-align: justify;\">NATIONAL : 47%<br \/>\nBC : 42%<br \/>\nAB : 50%<br \/>\nSK\/MB : 63%<br \/>\nON : 50%<br \/>\nQC : 39%<br \/>\nATLANTIC CANADA : 47%<\/p>\n<p><a href=\"https:\/\/globalnews.ca\/news\/4374001\/boomers-millennials-house-prices-canada\/\" target=\"_blank\" rel=\"noopener\">Royal LePage : Baby Boomers Are Back in the Housing Market &#8211; and It will Impact Prices<\/a> by Erica Alini | Global News<\/p>\n","protected":false},"excerpt":{"rendered":"<p>More than 1.4 million Canadians between the ages of 54 and 72 expect to buy a house in the next five years, according to a new survey by real estate &hellip; [<a href=\"https:\/\/www.roryc.ca\/blog\/2018\/08\/baby-boomers-are-back-in-the-housing-market-and-it-will-impact-prices\/\">read more<\/a>]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[],"class_list":["post-10060","post","type-post","status-publish","format-standard","hentry","category-market-updates"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Baby Boomers Are Back in the Housing Market - and It will Impact Prices &#8226; Rory C Real Estate | Oakwyn Realty<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.roryc.ca\/blog\/2018\/08\/baby-boomers-are-back-in-the-housing-market-and-it-will-impact-prices\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Baby Boomers Are Back in the Housing Market - and It will Impact Prices &#8226; 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