A majority of Canadian seniors polled by IPSOS on behalf of HomeEqutiy Bank are reluctant to downsize, believing their homes are the most reliable way to retire comfortably and age in place.
“People taking out reverse mortgages with us are using that money for home care, which allows them to stay in their homes a little longer,” said HomeEquity Bank CEO Steven Ranson. “We’ve also done surveys in the past where people have reported feeling pressure to downsize, but to give up a place you have lived in for 30, 40 years to move into an unknown place doesn’t make sense to a lot of people.”
The most recent survey showed that 76% of respondents, all of whom are at least 55 years old, felt pressured to downsize even though they didn’t want to. Forty-five percent of respondents believe accessing home equity should be part of their retirement planning, but only 28% would go through with it.
As COVID-19 has ravaged elderly care facilities, Canadian seniors are understandably circumspect about selling their homes only to downgrade into potentially perilous living conditions. Moreover, they would sacrifice autonomy—not exactly a welcome prospect.
Ranson says the latter factor rang true before the pandemic.
“COVID or no COVID, we do these surveys all the time and 80% or more want to stay in their homes for as long as they can,” he said. “Not forever, but longer than they might otherwise be able to. Longer than society thinks is the norm.”
In a booming housing market, finding a new home isn’t as easy as it used to be. Even if seniors were to downsize from a single-family home into a condominium, being pulled into a bidding war would still be a distinct possibility in Canada’s larger housing markets.
“If you have to list your house, do you want people tracing through your house during a pandemic when you’re in an age group that’s most at risk?” The process of finding a house is hard and you could potentially get into a bidding war. If you have a young family, you might have to, but if you don’t, who wants to take that on?” said Ranson. “It used to be that you could downsize and move into a condo because it’s cheaper, but it’s not true anymore. Condo prices have taken off in the last little while, and the odds are a condo is the price you currently have on a square footage basis.”