Ontario baby boomers are planning to downsize or move out of big cities: survey
Parents re-entering market after their children stayed home longer than normal, survey suggests
More than half of Ontario baby boomers consider big cities unaffordable for retirement, according to a new survey from Royal LePage. So they're considering moving out, or downsizing.
That means that baby boomers are looking to re-enter the housing market by selling their family homes.
The survey polled 1,000 Canadians, born between 1946 and 1964, online between July 12 and July 17, 2018. Ontario respondents were the most likely to consider downsizing — about half said they were considering smaller spaces.
"When we decided to sell, it was because the kids weren't around that much anymore and the house was just too big for us," said Tino Petrossi, a GTA resident.
Petrossi, 54, sold his custom-built house in Aurora, Ont., and moved into a condo in Burlington, Ont., in 2015.
For many of the survey's respondents, staying in family homes just wasn't considered affordable. The survey indicated that 63 per cent of Ontario respondents find the province too expensive, much higher than the national average. The only province that ranked higher was British Columbia, at 78 per cent.
Retiring to the 'country'
Phil Soper, CEO of Royal LePage, said smaller, touristy towns — he cited Collingwood, Ont., and Tremblant, Que., as examples — have gained appeal because they have similar amenities to big cities like hospitals, movie theatres, restaurants, with a "country feel."
And that's what the boomers like Petrossi want. He said he moved to the condo in Burlington to be closer to entertainment, restaurants, and most importantly, his kids who attend universities in western Ontario.
"It's just a lot easier for me to do the commute or have them come visit me," he said.
For Petrossi, the choice to move to Burlington was personal, rather than financial. But the survey indicated many baby boomers are moving to save money.
"Obviously it's not a new trend to look to retire to the country, but to base it purely on the fact that it's unaffordable to live where you are today is a new trend," said Soper.
Late to leave home
This is the first time in a long time, according to the survey, these people have been in the market because their children — mostly millennials — didn't fly the nest as early as previous generations.
According to the results, 18 per cent of boomers said they didn't expect their children to leave home before the age of 30. Nine per cent said they didn't expect them to leave before 35.
"I was absolutely stunned," said Phil Soper, CEO of Royal LePage.
"I'm a baby boomer, and I know that when I left home, it was normal to leave home in your early 20s. If you hadn't left the nest by 30, that was a pretty big deal."
But Petrossi, who has three kids, wasn't surprised by the number.
"I think it comes down to affordability, and also lifestyle. I think my kids and my friends' kids, as much as they probably want to have their own place, their priorities aren't quite the home or the mortgage," he said.
Petrossi said he had moved out and purchased his first piece of property before he was 25, but considers himself fortunate. For his kids, he said he's OK with them staying at home a bit longer than he did.
"Of course as parents, we're still coddling our kids so we're more accepting of having them home longer," he said.
Concerns of housing affordability
The woes of millennials and housing prices are not new. According to Statistics Canada, just over a third of young adults, aged 20 to 34, lived with their parents in 2016. In Ontario, the number was higher: 42.1 per cent.
Paul Kershaw, a professor at UBC, published research last year that showed it now takes more than 15 years for someone in the Toronto area to save up a 20 per cent down payment on a home. Back in 1976, it took around six, and up until 2010, it took just under 12.
But, according to Soper, this is the first time the same concern has been noted among baby boomers.
"We haven't seen the same widely held belief that the neighbourhood or region that near-retirement age people live in had become completely unaffordable," he said.
'Pressure' on the market
With what Soper called the "relatively quiet" generation now looking to sell their homes and buy other property, he said there might be some relief on the housing market, especially in big cities, as boomers increase supply by putting their homes up for sale.
But, much of the boomer population indicated that they would prefer to move into a condo, especially in Ontario. The province's baby boomers are the most likely to consider downsizing as they approach retirement.
That could push some condo prices up.
"There could be some pressure on the availability and the price of larger condominiums," said Soper.
But, Soper said the concern about housing still lies with millennials, not with baby boomers.
"Housing prices did get away on baby boomers, but I believe that it's more of an opportunity than a challenge," said Soper.
"It's a challenge for young people; they're the ones we need to be concerned about. Baby boomers are well off and they'll have lots of options ahead of them."