It will bring a new wave of homes that are very low maintenance, like condominiums or seniors residences. At the same time the shift will put downward price pressure on the traditional single detached home which has skyrocketed in price over the past 15 years.
Already the Canadian Home Builders’ Association says its members are catering to the aging population by building more condos and retirement communities to meet the growing need.
Baby boomers, when they were in their 20s in the 1970s, helped drive the market to new heights with new housing starts reaching a record 274,000 in 1976. Then it was the boomer’s children, the echo-boomers, who helped drive the market last decade as they began forming households. Now, it’s going full circle with boomers downsizing. In 2006, 57% of condo owners were over the age of 50 while 17% were over the age of 75.
The trend is only expected to pick up steam as boomers abandon their single family homes.
“The point is not just retirement homes. The trend as we look ahead is more and more to multiple family dwellings,” says Pedro Antunes, director and analysis at the Conference Board, and one of the report’s authors. “The changes will happen but they will be slow over time.”
Mr. Antunes says the stock of single family homes probably won’t decline as others fill the gap and live in them, but there will not be as many new ones built and renovation activity will also slow.
That could impact long-term prices for single family homes although other economic factors could intervene. “It’s going to be a smaller cohort [that wants single family houses] but with a housing stock that large you would probably expect an easing in price for those types of homes,” said Mr. Antunes.
He expects boomers to stay in the labour market through the senior years, which will keep them in urban areas. ”They might work less hours and part-time but that meanings housing that is close to work places and not an exodus to the country.”
John Kenward, chief operating officer of Canadian Home Builders’ Association, believes the renovation market will continue to prosper as many seniors renovate their homes to meet the needs of getting older.
“It is not the case as people become older that they want to move. Often they want to stay right where they are in their neighborhood with their family and friends. So you’ll see an adaptation of the home,” says Mr. Kenward.
There is also growing acceptance that housing stock has to be adapted to meet the needs of an aging population.
“That’s why you hear so much about lifestyle communities these days,” says Mr. Kenward. “People look for communities with golf courses, recreation features for things like walking. It’s not what you might think of as retirement.”
Source: Garry Marr, Financial Post