By Holly Welles
Brokers and agents should expect to see new developments in the housing market as the senior demographic continues to expand. With a higher percentage of boomers moving toward retirement, senior-friendly homes are reporting lower vacancies. This downsizing will cause repercussions in the industry.
Better access to more reliable healthcare has allowed a greater number of people to survive into their old age, a trend also present in other countries around the world. Though it represents a positive shift in disease prevention and medical technology, it brings with it secondary and tertiary effects.
In Canada, the prevalence of the senior demographic – which grew 21.7 per cent between 2006 and 2016 – outpaced available housing at a disconcerting rate. Canada Mortgage and Housing Corp. (CMHC) predicts a steady increase in the elderly population in the coming years with few signs of slowing.
Demand for senior housing will accelerate, and real estate agents will have to adjust for this change. They’ll act as intermediaries between an unprepared market and a clientele in need of special accommodations, contending with scarcity and slow construction times.
“We’re so far behind where we ought to be, given we know these trends are happening and we’ve known about them for the past 20 years,” says Mark Rosenberg, Canada Research chair in development studies at Queen’s University in Kingston, Ont.
At the current rate of growth, Canada will require an additional 131,000 spaces for the senior demographic in less than a decade – a number that almost doubles by 2046. The investment necessary in both the public and private sector poses an immense challenge regarding resource and property management.
One way that is being explored as a way to quickly add more housing stock for seniors is the rezoning of decommissioned commercial buildings. Repurposing aged properties that have fallen into disuse can free up space that would otherwise serve no utility. It would allow for the construction of new residential homes and apartments for the elderly. Retrofitting old buildings also lowers energy waste and costs by replacing old, unsafe electrical and plumbing systems with modern utilities.
However, Rosenberg says that in many cities, land that could be recycled to address the issue of unavailable senior housing remains abandoned due to apathy. This waste of finite land will only contribute to the growing problem that older Canadians face.
A shift in the millennial demographic is also bringing a new set of challenges and necessitates flexibility. But millennials represent a positive influence on the housing market. Of the 32 per cent of Canadians who intend to buy a home during the next two years, millennials represent half. Several factors influence their confidence.
Young Canadians are optimistic about the prospect of home ownership due in part to a greater trust in their country’s economy. Their fear of finding and keeping reliable employment is low, and many of them benefit from the financial assistance of their parents. Most have a safety net to depend on in emergencies.
This is not to say that Canada’s housing market has provided millennials a stable landscape. Property prices are high, particularly in the Vancouver and Toronto markets, and rising mortgage rates present a steep barrier to entry for young members of the workforce who lack the income to afford regular payments. This issue is not a critical deterrent, however.