A new report from Royal LePage suggests the real estate market is going to get crowded in about five years’ time.
According to the The Royal LePage Boomer Trends Survey, 1.4 million baby boomers are expected to buy and sell homes in the next half-decade. However, 9% of boomer parents don’t expect their children to move out before they turn 35—a number that nearly triples in B.C.—and 32% of home-buying boomers will likely opt for a condominium.
“One other thing that stood out in the report to me is 56% of baby boomers believe that where they live today, their local neighbourhood is unaffordable for them for retirement purposes,” said Royal LePage’s President and CEO Phil Soper. “Part of the trigger sending so many baby boomers back into the market is relocation. They’ve indicated that they will relocate from single-family homes to condominiums, to suburban neighbourhoods, and to recreational areas. They’re clearly saying ‘The place that I lived to earn a living and raise children is not the optimal place for semi-retirement or retirement as an empty nester.’”
If boomers do, indeed, flock to condominiums and to the suburbs over the coming years, expect that their interest will be reflected in price points.
“What it will probably do is put price pressure on condominiums and suburban areas with a recreational feel that are within a couple of hours of where they live today, which is within a couple of hours of big cities,” said Soper. “A significant portion wants to live within an hour of where they live today and the next largest group wants to live about two hours away.”
Royal LePage has previously studied what it calls peak millennials, who are between the ages of 25 and 30, and it reckons they’re one the largest demographical cohorts to enter the housing market in Canadian history. Coupled with boomers, there should be no shortage of activity in the real estate market over the next decade.
“We are starting to see the millennials enter the market in a big way. The last few years they’ve been a factor to the point that they are the largest buying demographic now in transactional terms. One of the other interesting pieces from the report, a significant number of baby boomer parents are going to be helping their kids in real estate. I’m a late boomer and I can tell you it was rare when I was in my 20s for parents to play a significant role in kids getting homes, but what we found in this study is 47% are going to subsidize their kids’ home purchases.”