Baby boomers hold a lot of wealth, especially in the real estate market, and they intend on unleashing it over the next half-decade, says a survey from Royal LePage.
The survey, conducted in tandem with Statistics Canada, of Canadians born between 1946 and 1965 determined that 35%, or 3.2 million people, are considering home purchases in the next five years, with 45% stating that now is a good time to buy. Forty percent of the respondents have at least 50% of their net wealth tied up in real estate.
Fifty-two percent of boomer homeowners would, however, prefer renovating their present homes than move. Seventeen percent of survey respondents own more than one home, and 64% of surveyed boomers aren’t carrying mortgages.
A quarter of respondents stated they would have to financially assist their children to purchase a home.
“The boomer generation appears to have no intention of slowing down,” said Phil Soper, president and CEO of Royal LePage. “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.”
Fifty-six percent of the 35% of boomers considering buying a new primary residence in the next five years would opt for a rural or recreational region, while 28% would upsize their new property. Of those who would downsize, 71% cited reduced maintenance as the reason, while 39% said they would unlock retirement funds, 29% want to travel, and 9% would spend the money towards buying their children a home.
Soper noted that most boomers interested in home purchases are looking to enjoy their later years, although some want to live in quieter environments without sacrificing space. As such, he expects home sales in exurban areas to remain elevated in the years ahead.
Moreover, the survey results heavily suggest real estate equity is the means through which boomers intend on retiring comfortably, even leisurely.
“The boomer generation strongly values home ownership, for good reason. Real estate has been very, very good to them,” said Soper. “Most are still working and their home equity has become the bedrock of retirement security. Financially confident, their next move is a matter of lifestyle choice.”
The survey revealed that 37% of Boomers in Canada’s most populous province want to buy a home in the next five years, however, that number hits a whopping 41% in Toronto. According to the Royal LePage-StatCan survey, 76% of Ontarian boomers own their own home—64% and 60% in Ontario and Toronto, respectively, are mortgage-free—with 16% owning multiple properties.
“The pandemic has left a lasting impact on many younger boomers who are trying to get more from their home after a year of COVID-19-related health restrictions. Many are looking for more space to entertain, help out with the grandkids or continue to work remotely. Not all boomers have the luxury to upgrade to a larger space, but the desire is there,” said Toronto-based Cailey Heaps, who leads the Heaps Estrin Team at Royal LePage Real Estate Services.
In Canada’s second-most populous province, 29% of boomers surveyed are contemplating a home purchase in the next five years, however, that’s among the lowest in the country, says the survey report. Moreover, Montreal has among Canada’s lowest rate of boomer homeownership at 62%, though the rate climbs to 67% for the province, 57% of whom are mortgage-free. Sixteen percent of Quebec boomers own more than one property and 34% derive at least half of their net wealth from real estate. Fifty-three percent of Quebec boomers will buy a detached house if they follow through on their intentions to purchase, and 20% would opt for an apartment or condominium.
Of the 29% of boomers in Quebec who are considering buying a new primary residence in the next half-decade, 62% would move to a rural or recreation region, while 32% would buy a larger home than the one in which they current live, and 53% would buy something equal in size, while 59% in the province and 55% in Montreal would downsize.
Despite, relative to the rest of the country, the low homeownership rate among boomers, Quebec is among the leaders in one category, says Georges Gaucher, broker and owner of Royal LePage Village.
“While the expectation may have been that boomers would downsize into condominiums en masse, the proportion of Quebec boomers looking to move into a larger property is among the highest in Canada,” she said. “Although prices continue to rise in the Belle Province, it remains one of the most affordable markets in the country.”
In B.C., 39% of boomers are considering a home purchase in the next five years. Of the 79% of boomers in the province who own their home, 73% are located in Vancouver, which has Canada’s highest home prices. Sixty-six percent of boomers in the province don’t have mortgages, and 64% in Vancouver are mortgage-free.
Forty-eight percent of boomers province-wide have at least half of their net wealth in real estate, and 18% own more than one home.
“Boomers are the most affluent generation in Canadian history and appreciate the equity they have built up in their homes,” said Caroline Baile, an associate broker at Royal LePage Sussex in North Vancouver. “While many did not have an immediate need to move due to additional space requirements, as safety restrictions are lifted and the vaccine roll-out is in full gear, many boomers will again think about their next move.
“The trend we’re noticing among this group is rightsizing, rather than downsizing. They may choose a slightly smaller home, but they still want some outdoor space and room to entertain. Townhomes are very popular today among younger boomers, who aren’t quite ready for a condo but enjoy the freedom of a property with lower maintenance.”