Many B.C. residents are banking on a real estate market correction to improve housing affordability – but it looks like many of the province’s baby boomers are banking on the opposite, according to a Royal LePage survey released August 8.
As prices in the region increase, 43 per cent of B.C. residents aged 54 to 72 plan to downsize their home in retirement, with 42 per cent saying they would consider buying a condo.
More than a quarter (26 per cent) of B.C. respondents to the national poll said that they had more than half of their retirement savings tied up in real estate.
The B.C.-specific results run contrary to those of a recent national survey by Ipsos, which found that 95 per cent of Canadians aged 65-plus intend to stay in their current homes through retirement.
The survey found that 70 per cent of B.C. boomers own their home, which is the lowest proportion among the provinces – across Canada, it’s 77 per cent. Even for homeowners, affordability is an issue, with 37 per cent saying that they would consider moving locations when downsizing, in search of a more affordable home. Fewer than one in five (19 per cent) said they consider housing in their region affordable – the lowest rate in the country.
“More and more we’re seeing baby boomers in British Columbia downsizing from a detached home to a condominium,” said Michael Trites, managing broker of Royal LePage Northstar Realty. “Increasingly they are transitioning into condos to unlock some of the equity they have built up in their homes, while gaining more flexibility as their health and lifestyle preferences change.”
With so many British Columbian baby boomers relying on the huge uplift in home values to fund their retirement, it’s not surprising that the vast majority (88 per cent) said they believe real estate is a good investment. What is perhaps more surprising is that fewer than half (42 per cent) of B.C. boomer respondents with children said that they would be willing to subsidize their children’s purchase of a home.
Across Canada, around 17 per cent of baby boomers are expecting to buy a new home in the next five years. Extrapolated to a total of 1.7 million Canadian buyers and sellers, this is “expected to meaningfully impact the market,” according to Royal LePage’s report.
Phil Soper, president and CEO of Royal LePage, said, “The one out of every six boomers who are planning to purchase a home within the next five years together constitute a large group that will foster competition for properties across all housing types, particularly in the condominium segment, as well as in smaller cities surrounding major centres.”