Despite the perception that aging baby boomers may create an oversupply of traditional single-family homes as they downsize into smaller residences, a new Royal LePage Real Estate survey shows demand for suburban detached homes remains strong among this generation.
The Leger Marketing poll found that of the 40.6 per cent of baby boomers (born between 1947 and 1966) who do have plans to move to another primary residence, almost half (43.5 per cent) are looking to purchase another primary residence that is a similar size or larger than their current property. Of the total responses from baby boomers who intend to purchase their next primary residence, 66.8 per cent said they will do so in the next five years.
“This study clearly indicates that contrary to popular belief, most boomers do not intend to downsize anytime soon,” says Phil Soper, CEO of Royal LePage.
Male baby boomers who are planning to move are more keen on upsizing their residence than women, with 23 per cent reporting they plan on moving to a larger residence compared to 12.1 per cent of women. Baby boomers looking to purchase a condominium prefer less amenities and low maintenance fees (54.5 per cent) over properties that have many amenities (39.1 per cent). Seventy-eight per cent of baby boomers currently own their own homes.
Contributing to the desire of baby boomers to continue to invest in large, suburban homes is the reality of housing children well into adulthood. According to the survey, 25 per cent of Generation Y, also known as the Millennial Generation, lives rent-free because of arrangements with family or friends. That number climbs to 33.4 per cent in the Prairies, 29.7 per cent in Quebec, and 27.2 per cent in Ontario.
“The adult children of baby boomers aren’t going anywhere fast,” says Soper. “Good jobs have proven more difficult for them to find, they’re extending their studies and they’re living at home. It is no wonder the concept of swapping a family-sized home for a small retreat has lost its luster.”
Meanwhile, members of Generation Y (those born between 1980 and 1994), who plan to purchase their next residence are most interested in single-family multi-storey homes (50.6 per cent) and bungalows (19 per cent). Only 15.7 per cent of Generation Y said they plan to buy a condominium or rent an apartment. In comparison, 22.9 per cent of baby boomers looking to purchase/rent their next residence desire condominiums or apartments.
The survey found more than half of Generation Y planning to purchase their next residence, intend to purchase in the suburbs (55.7 per cent) compared to the downtown core of a city (21.7 per cent). Forty-three per cent of current non-owners who plan to purchase in the next five years say it is because they are planning to start a family in the near future. Among this younger demographic planning to purchase their next residence, the safety of a neighbourhood and proximity to their work, family and friends are the most important attributes when selecting a new home. Keeping in mind nearly half of Generation Y listed their near-term plans to have children of their own (42 per cent) as a motivating factor to purchase, the least important factors are proximity to the downtown core and restaurants or entertainment.
“The young people who make up Generation Y are our first-time home buyers. Like their parents, they dream of owning a lovely house in the suburbs, which provides value as well as access to parkland for children to play and the perception of greater family safety,” says Soper. “Even as condominium living becomes more popular across Canada, the study results do not point to a corresponding decrease in demand for traditional single-family homes. For the baby boomers that do head downtown, there is a generation waiting to move in.”
Among baby boomers who plan to downsize when they purchase their next residence, the most popular reasons are to reduce maintenance (73.7 per cent), free up money for retirement (48.1 per cent) and for travel (30.9 per cent).
