The number of seniors aged 65 and over is projected to almost double from 2.6 million, or 17.6% of population to 4.5 million, or 22.2%, by 2046. The growth in the number of seniors is set to accelerate over the 2020–2031 period as the last cohorts of Boomers turn 65. After 2031, the growth in the number of seniors will slows significantly.
According to a 2020 study conducted by Campaign Research Inc. on behalf of Home Care Ontario, virtually all Ontario seniors (91%) hoped to stay in their own home or apartment as long as possible, and 95% believed being in their own home (with the support of home care) is the safest environment for them to live during a pandemic.
Subsequent surveys during and after the pandemic lockdowns of the past two years now indicate that as many as 96% of seniors want to remain in their own homes — the negative impact from COVID has caused many Boomers to rethink their life choices.
Boomers are not moving
In the Toronto and GTA marketplace, this trend of Boomers not moving from their family homes has greatly impacted the supply of homes available for younger generations to purchase. Boomers do not have to move — so long as they are in reasonably good health and have the financial means to support the lifestyle of home ownership. This is not the generation of frail seniors that we knew from our grandparents’ generation.
Many homeowners are financially comfortable enough that they don’t need to downsize to fund their retirement. Many would rather renovate and retrofit (think stair gliders) and hire private help when the time comes.
A recent real estate report says Canada’s record-low supply of real estate is being compounded by an emerging trend: Boomers who won’t let go of their homes. This trend was also noted in a study by Royal LePage, which that found a majority of Boomer homeowners would prefer to renovate their current property over moving. The study also found 75% of Boomers own their own home, and 17% own more than one property.
So, what does this mean for the real estate market?
If Boomers and older adults are not moving out of their family homes, what does this mean for Millennials who are growing their families and need more space? This trend is creating a bottleneck in supply, and sadly the finger is pointed at those 65 and older.
Of Canadians born between 1946 and 1965, 40% of the respondents have at least half of their net wealth tied up in real estate. 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. “Real estate equity is the means through which Boomers intend on retiring comfortably.” Many are still working, and their home equity is the bedrock of retirement security.
Yet another factor cited in the trend for Boomers to stay in their homes has been the rise in reverse mortgages. Canadians aged 55 and over can draw on a portion of their home equity to boost their liquid income, while staying in their homes. In 2020, Canada’s reverse mortgage debt passed the $4.4-billion mark, up 12.5% over the previous year.
Retirement should be exciting
After years of putting in time and building a career, one should sit back and enjoy the results. However, seniors retiring today have more on their plates than they probably anticipated. Many enjoying working well into their late 70s and beyond, yet some have opted to seize the day and retire early.
For those who need care and would prefer to remain in their long-time homes, the costs of full-time care can be prohibitive. Many groups in Ontario have been advocating for government funding to cover caretaker costs. And for those who are wanting to stay at home, technology is adding multiple products to make living more secure, with programs that will remind the senior to take their medication on time or an Apple watch which can detect a fall and call 911 automatically.
Boomers will be on the move again
Prior to the COVID-19 pandemic, the traditional route for many Boomers was to sell their family home and downsize to a condominium or smaller home in the city, the suburbs, quaint towns, or, if necessary, retirement homes.
As the pandemic wanes and confidence resumes, Boomers will be on the move again. This will clear the current bottleneck so that Millennials will be able to buy their dream home with a garden for their growing families.