An interesting report came out this week from Royal Lepage about Baby Boomers. The headline reads “Most Baby Boomers have no intention of downsizing.
“The poll by Leger Marketing found that of the 40.6 per cent of Baby Boomers (born between 1947 and 1966), who do have plans to move to another primary residence, almost half (43.5 per cent) are looking to purchase another primary residence that is a similar size or larger than their current property.
I was a little confused at first, since “most” equals more than half, not almost half. But, if you consider that nearly 60% are not planning on moving anywhere, and a good portion of those that are, will go bigger not smaller, then the vast majority are not planning on downsizing. This is certainly contrary to what many demographers have been telling us – that the boomers will start moving into condos and old folks homes, leaving a glut of single family homes on the market.
If the boomers live out the end of their lives in their big, single family homes, and builders keep building new single family homes for younger families, could the market be even more oversupplied with these homes? Or will the free-loading kids currently living rent free with their boomer parents never move out, and just inherit the mansions? Currently, 33% of gen Y prairie dwellers live with family for free.
“The adult children of Baby Boomers aren’t going anywhere fast. Good jobs have proven more difficult for them to find, they’re extending their studies and they’re living at home. It is no wonder the concept of swapping a family-sized home for a small retreat has lost its luster,” said Phil Soper, CEO of Royal LePage Real Estate.
Also surprising, nearly 70% of the members of gen Y (born between 1980-1994) considering buying a home, want a single family residence, not a condo. Nearly 60% of these kids want to buy in the ‘burbs. They say this is because they want to start families, and stay close to family and friends. This is vastly different from the trend reports we’ve been hearing about wanting to be closer to downtown. In fact, the survey showed that proximity to downtown, restaurants or entertainment was the least important factor for gen Y’ers when choosing where to buy.
“The young people who make up Generation Y are our first-time home buyers. Like their parents, they dream of owning a lovely house in the suburbs, which provides value as well as access to parkland for children to play and the perception of greater family safety,” said Soper. “Even as condominium living becomes more popular across Canada, the study results do not point to a corresponding decrease in demand for traditional single-family homes. For the Baby Boomers that do head downtown, there is a generation waiting to move in [to their single family homes].”
I have to say, this survey matches the experiences we are having with our clients more than what demographers have been telling us. Perhaps this survey is more of a snapshot of “now” and the demographers are telling us about the future. But almost all of the young couples and especially families we are working with now, want single family homes. These clients are choosing the suburbs for the most part, because they can get the home they want (a decent size that doesn’t require renovations) for a price they can afford.