Baby boomers (aged 46 to 67) make up 29% of Canada’s population. This generation is known for their love of single-family detached homes. According to the Conference Board of Canada, baby boomers are starting to downsize and move into smaller homes or assisted living. Will this cause an influx of these houses on the market? Research into changing demographics suggests not.
Census data shows that between 2001 and 2011, the number of people living in single-individual homes (condos, small apartments), grew from 25.7% to 27.6%. As baby boomers look to downsize, they will join the growing trend of increased demand for smaller dwellings in the long term.
But relocating baby boomers are not the only reason that more people are looking for smaller units. Canadians who are not married or living in a common law relationship represented 28% of the population in 2011 (as opposed to 27.6% in 2006). In addition, the number of Canadians in their 20s living in a couple went down 2 per cent from 32.8 % in 2006 to 30.8% in 2011.
What does this mean for Canadian real estate? If demand for single-family detached units continues to decline, that could represent a significant price drop for these units. Additionally, with demand for smaller units like condos for sale, prices of these homes could continue to rise.
However, there is a mitigating factor which will likely prevent this shift from being too dramatic or having an overtly adverse effect on the housing market.
As the baby-boom generation ages, their kids (now aged between 21 and 41) will start striking out on their own and starting their families. Though marriage rates are declining, there is still demand for family homes. These adult children of the baby boomers will contribute to striking a balance between exodus and influx from and into single-family detached houses.
Another group that will help that balance are international immigrants who will contribute to the demand for this kind of housing. That, combined with a slowdown in construction of detached homes, will help ensure that relative value of these units will remain stable.
If you are looking to downsize in preparation for retirement, click here to read our suggestions of 5 things to look for in a retirement home.
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