Article updated Monday, August 19, 2013
The Canadian housing market is undergoing a booming change – all thanks to baby boomers. Today, an increasing number of older homeowners are looking to shed their single-detached homes for smaller and more convenient spaces.
For multi-residential property owners and managers, this growing demographic, which is looking to transition into condominium apartments and townhomes, can be an important source of stable tenants and revenue.
“The changes in the needs of baby boomers (now aged 46 to 67, and accounting for roughly 29 per cent of the total population) will have a large influence on the housing market in coming years,” writes Julie Adès, an economist with the Conference Board of Canada. “As their children leave home, members of the cohort will become ‘empty-nesters.’ And while some may opt to stay in their single-detached homes for the rest of their lives, a sizable share will move into smaller, lower maintenance homes.”
According to Toronto-based real estate professional, Magda Mo, the number of mature adults looking to buy condos has noticeably increased during the past five years. These homeowners, whether retired or still working, want to have equity in their new space. This leads them to predominately purchase condominiums.
“(Only) a very small proportion rents,” says Mo, who has 25 years of experience in the industry.
But attracting this growing demographic comes with its challenges. To successfully do so, property owners and managers must know who their target audience is and what this specific group requires from a building.
Developers and management that gear their properties to young families or bachelors will quickly turn off mature adults. In fact, Mo says many downsizers look for buildings that are marketed exclusively towards their own demographic.
And for buyers leaving behind larger homes in the suburbs, space is a big issue.
“You don’t find many of these buyers moving into a 500-square-foot (condo),” says Mo. “The minimum is 1,200 to 1,500 square feet.”
The size of the building as a whole is also important. Mo says many older buyers look for buildings that have 300 units or less – a building with too high a density can be a turn off in itself.
Location is another important factor. Hip, up-and-coming neighbourhoods are likely better suited for yuppies than retirees. Mo says mature buyers tend to look for condominiums in already established neighbourhoods located near transit and where amenities are in close proximity.
“They may not want to drive all the time, so accessibility is important,” she says.
According to the Conference Board of Canada’s Adès, the number of boomers looking to downsize will only continue to grow in the near future. Census data from 2011 shows that the number of boomers living in single-detached homes starts to dip after the age of 55.
“While 67 per cent of the population aged 50 to 54 occupied a single-detached home in 2011, this proportion dropped to 59 per cent for the population aged 75 to 79,” she writes.
With older Canadians in the baby boomer generation nearing their 70s, the demand for condos to accommodate them could very well peak in the near future.
Daniel Viola is the online editor for Canadian Property Management and Building Strategies & Sustainability magazines. He is also the editor of Property Management Report.