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 Royal LePage.
Boomers will be either downsizing to smaller properties in their hometowns or looking for greener — and cheaper — properties away from the city.
According to Royal LePage president and CEO Phil Soper, Canada’s housing market has already been through “a boom, bust and echo“, a quote from the book Boom, Bust and Echo by Canadian demographer David Foot.
So what’s the story of the boom, bust and echo of Canada’s housing market?
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.
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.
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.
A whopping 56 per cent of those surveyed consider their local housing market unaffordable, a percentage that grows to 63 per cent in Ontario and 78 per cent in British Columbia. However, the solution for many isn’t to stay put and downsize but to move away.
“Our research does indicate that smaller cities and recreational areas will attract more investment than major cities,” Soper said in a statement.
Smaller towns with picturesque landscapes and recreational amenities will likely be the destination of choice, Soper said. He cited Collingwood, Ont., White Rock, B.C., Saskatoon and Mt. Tremblant, Que., as examples.
Baby boomers are the “most affluent generation in Canadian history” and they are willing to give back, Soper noted.
“This is a generation that deeply values home ownership and very much wants their children to have the same opportunity.”
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 per cent, or 19 times out of 20.
Share of boomers planning on buying a new home within five years