Are Baby Boomers (born 1946-1964) responsible for breaking the Real Estate Market?
Today’s real estate market is one of the tightest markets ever recorded. Inventory is at a record low and we’re in a housing shortage crisis…..resulting in sky high housing prices.
Past generations have typically sold their family homes, downsized and moved to retirement communities when they reached their golden years.
Boomers currently own a considerable share of Canada’s real estate and tend to be staying put. Life expectancy rates have lengthened, people tend to have continued health longer than generations before them. Not to mention, that retirement age has been pushed back as well.
Many Boomers continue to work and just aren’t ready to retire yet. After witnessing the pitfalls in long term and retirement facilities during the COVID 19 pandemic many boomers are leery of calling this type of establishment, “home sweet home”.
Boomers had to watch their own parents and loved ones, who currently live in care facilities, live in isolation during the pandemic. Making them not so eager to speed up their retirement planning.
It makes me wonder if some are relishing their larger homes and having more space to roam, over being potentially confined to one room in a care facility, during our numerous lockdowns over the last couple of years.
A Royal Society of Canada Report published in 2020 stated, that during the early waves of the pandemic, Canada experienced a significantly higher rate of COVID-19 deaths in nursing homes than other comparable countries. 81% in Canada, compared to 28% in Australia, 31% in the US and 66% in Spain.
According to the Public Health Agency of Canada, by March of 2021, shockingly, more than 50% of all COVID related deaths occurred in nursing and seniors’ homes.
Boomers who have been in their homes for a number of years and have built up equity are financially able to hire private help, ensuring they are able to stay in their family homes for years longer than generations before them could. This is referred to as – “the aging in place trend.”
Also contributing to this aging in place trend, regarding Boomers staying in their homes longer, has been the rise in reverse mortgages. Canadians aged 55 and over can draw on a portion of their home equity boosting their monthly incomes while staying in their homes.
HomeEquity Bank, a major provider of reverse mortgage products in Canada, also recently disclosed, that the country’s homeowners are now carrying more than $5 billion worth of its reverse mortgages, the largest amount ever.
Buckle up Canadians… The real estate market isn’t going to change a whole lot in the foreseeable future! We may be in for the long haul!