The nature of what we do here means we spend a lot of time reading about real estate market trends in Canada, and many times we read what is called expert insight. On more than a few occasions we’ve read some of these insights suggesting that the Baby Boomer generation is going to less of a factor in the real estate market as they enter later senior years now. In theory it makes sense, but that’s really about it. Or so it would seem.
We say in theory because it would seem to make sense that people who’s children are fully grown and long gone and who are also not as independent as before would be looking to either stay put or move somewhere smaller or where extended care is more readily available. However, new information made available to the public seems to suggest otherwise.
This is very much information that new realtors should be taking note of, and if you’re one of the many who are new to the business then our online real estate lead generation system is a sure fire way to get more out of the efforts you put into building your client base. You want to move towards making a good living in real estate as soon as possible, and nothing does that better than acquiring clients that are so pleased with you and your knowledge of real estate that they refer you to other clients.
So if we’re speaking about being knowledgeable about real estate, one thing you can know is that rumour of the baby boomer generation starting to be less of a factor in real estate isn’t such an accurate prediction it would seem. Let’s look at that here today.
Continued #1 For Home Equity Wealth
One thing that has never been suggested is that the boomer generation doesn’t have the greatest amount of equity amassed in their homes. Fortuitous timing for when you were born has been great for these people, but that is what it is these people hold a lot of wealth in the real estate market that they plan to unleash over the next half-decade, according to a recent Royal LePage survey that also had Stats Can in on it.
It appears that about 35% of people born before 1965 are considering the purchase of a home some time in the next five years, and that works out to more than 3 million people. In a country where the supply (low) to demand (high) ratio is already majorly skewed to make it a buyer’s market, this is a VERY major consideration moving forward.
45% of these people indicated they thought now is a good time to buy, despite there being a recent dip in the frenzy of real estate activity in Canada. The most likely belief here is that prices are going to rise even higher, and so the old ‘no better time than the present’ adage fits yet again.
40% of respondents said they have 50% or more of their net wealth tied up in real estate. This may be the most telling finding of all of them to indicate why the Federal government is hesitant to intervene too much in the industry and force the ‘correction’ many people were hoping for. 17% own more than one home, and 64% of homeowners in this age bracket own their home completely – no mortgage.
There was a very good and interesting article in Maclean’s magazine a few years back called ‘Stay Away from My Housing Bubble’ and it really lays out how a general large scale decline in real estate values would crush retirement dreams for a lot of people.
Everyone will agree that these homeowners should be able to get the most value out of their homes if a good retirement depends on it, so here we are with a situation that’s going to continue.
Renovations Too
The survey found out as well that a little more than half of boomer homeowners would choose to renovate present homes rather than move. Many respondents also said they would be using their equity wealth to help their children purchase homes, and of course this is especially true in Canada’s more desirable area big cities like Toronto and Vancouver.
Long story short – Millions of boomers are expected to wade into the market over the next 5 years.
Let’s look at the rest of what the report found based on a by-Province analysis.
Ontario
37% of Boomers in Ontario want to buy a home in the next five years, 41% of them in Toronto. 76% of Ontarian boomers own their own home, 60% or so of them are mortgage-free, and 16% ownmultiple properties.
Quebec
29% of boomers surveyed will contemplate purchasing a home within 5 years. Montreal has among Canada’s lowest rate of boomer homeownership at 62%, but 57% of Quebec boomers are mortgage-free. 16% own more than one property and 34% have half or more of their net wealth in real estate.
British Columbia
Way out West 39% of boomers will consider a home purchase in the next five years. 79% of boomers in BC are mortgage-free, and that’s 64% in Vancouver with the country’s highest home prices. Overall 66% of boomers in all of BC own their homes outright.
48% of boomers in BC have at least half of their net wealth in real estate, and 18% own at least one other home. BC is also the province in Canada that has the number of baby boomers who own 3 or more homes, although that can include vacation properties and there are many along Canada’s Pacific coast.
__
Sign up for Real Estate Leads here and receive a monthly quota of qualified, online-generated buyer and / or seller leads that are delivered to you – and ONLY you – every month and providing you with the opportunity to be first-in-touch with people and families that have indicated a genuine willingness to make a move in the local real estate market. It’s a dynamite way to supercharge your client prospecting efforts and building your real estate business as effectively as possible.
