Canadian realtor Royal LePage has just come out with the results of a cross-Canada survey that many baby boomers may find startling. Apparently, 3.2 million Canadian boomers (people born between 1946 and 1965) are reporting plans to purchase a home in the next five years.
Considering that the older generation is widely regarded as being in the middle of a downsizing trend, this statistic might strike some as surprising. But wait.
First, Some Context
To put their findings in context, Royal LePage provided some fascinating data about what we are inclined to call the “boomer real estate mentality.”
- 40% of boomer homeowners have at least half of their net wealth in real estate
- 52% of boomer homeowners would prefer to renovate their current property over moving
- 17% of boomer homeowners currently own more than one property
- 64% of boomer homeowners are mortgage-free
- 25% of boomers say they have or would assist a child financially to buy a home
The press release supporting the survey quoted Phil Soper, President and CEO, Royal LePage who said:
“The boomer generation appears to have no intention of slowing down.”
Real Estate is a Good Investment
Added Mr. Soper: “Fully vaccinated, and turning a cold shoulder to retirement, the typical member of this huge demographic is enjoying an empty nest and believes real estate is a good investment. Millions of boomers are expected to wade into the market over the next five years.”
Drilling Down Into the Numbers
Drilling down into the Royal LePage survey numbers reveals that boomers come with many different expectations when it comes to real estate:
- 57% of respondents said they would purchase a detached house if they were to buy
- 19% said they would prefer an apartment/condominium
- 56% say they would consider moving to a rural or recreational region
- 63% would consider downsizing, in order to reduce the need for home maintenance
Mr. Soper was also quoted as saying: “Turning full circle to those carefree, pre-children years, most boomers are looking for a home that requires less maintenance,” before adding, “paradoxically, they also yearn for country living and don’t want to sacrifice living space.”
The Bedrock of Retirement Security
Banks of statistics are all very well, but you have to read between the lines. For many individuals, real estate has been, and continues to be, the bedrock of retirement security. According to the survey: “78% of Canadian boomers believe that home ownership is a good investment.” It’s that simple.
And the boomer generation continues to regard themselves as a kind of “bank of mom and dad.” 25% are willing to help their kids make their first move into real estate by gifting or loaning money for a down payment. In Vancouver, that number reaches 34%.
Conclusion: A Boomer Lifestyle Trend
Anecdotally, Canadian realtors report seeing evidence that more households are considering significant lifestyle changes and in many cases, relocating to less dense cities and neighbourhoods. This could help explain unprecedented sales in parts of suburban and rural Canada over the past year, and continuing today. As the value of these properties increase, so do the boomers' assets.
A house is more than bricks and mortar – it’s your home – but for Canadian boomers, it’s also a great investment.