Seniors staying in their homes longer, says CMHC

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Only a “minority” of older Canadian households are choosing to downsize

Published on November 16, 20234 minutes reading time

According to the CMHC study, the proportion of Canadians aged 75 and older who sold their homes declined steadily between 2016 and 2021.According to the CMHC study, the proportion of Canadians aged 75 and older who sold their homes declined steadily between 2016 and 2021. Photo by Jonathan Hayward /The Canadian Press

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Canadian seniors are choosing to stay in their homes longer, a new report from the Canada Mortgage and Housing Corporation has found. This suggests that those looking to invest in the housing market should not expect a flood of supply from older homeowners any time soon.

The report, released by the CMHC on November 15, examined the housing habits of different cohorts of Canadians, broken down into five-year increments starting with those born between 1917 and 1921. Significantly, it included the first group of baby boomers, those born between 1947 and 1951, who would have been 70 and 74 at the time of the 2021 census and would have an outsized demographic influence.

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The report found that the percentage of Canadians aged 75 and older who have sold their homes fell steadily to 36 per cent between 2016 and 2021, compared to 41.6 per cent between 1991 and 1996.

Currently, the sales rate in the 75 to 79 age group is just outside the first boomer wave at 21.5 percent.

The numbers suggest the property market will have to wait until this cohort reaches their 80s – when the sales rate among those aged 80 to 84 reaches 36.6 per cent – for supply to come to market.

“In Canada, the proportion of older households selling their home is only elevated in relatively advanced age groups,” the report says. “It will therefore be a few years before a significant proportion of senior households offer their properties for sale.”

Canada’s population is facing a major demographic shift, with the number of older households set to increase “significantly” in the coming years. Meanwhile, there is a serious housing shortage in the country. CMHC estimates that the country will need to build an additional 3.5 million homes by 2030 on top of current construction rates to close the affordability gap.

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CMHC found that the housing options chosen by older Canadians will have spillover effects on the market.

If they choose to stay in place longer, this means there will be fewer single-family homes available for the younger generation. But moving into condominiums and/or renting could also increase the prices of these housing types, exacerbating affordability issues for people in weaker economic brackets.

While condominiums are becoming increasingly popular among seniors, the CMHC found that “the actual trend toward this type of housing is quite limited.”

In 2011, 12.3 percent of those aged 65 to 69 in Canada owned a home. A decade later, home ownership among the same group ages 75 to 79 rose to 17.4 percent.

“These results therefore suggest that condominiums become more attractive to Canadian homeowner households as they age. However, the development towards condominiums appears to be limited, with the proportion of condominium owners increasing by only a few percentage points within ten years,” the report says.

The number of renters is now increasing as they get older, but the trend is less pronounced among younger seniors.

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Furthermore, only a “minority” of older Canadian households choose to downsize.

Reasons cited for the slow downsizing include the fact that Canadians are living longer and healthier lives, seniors have more money than previous age groups and are less likely to have to sell to finance their retirement, and homeowners have more housing types to choose from.

For example, in 2021, 12.1 percent of people aged 60 to 64 owned a one-bedroom home, up from 10 percent in 2011 aged 50 to 54. Nearly a quarter of 60- to 64-year-olds owned a two-bedroom home in 2021, compared to 21.1 percent of 50- to 54-year-olds in 2011. The largest downsizing decline was in the four-bedroom category -room homes where ownership fell 3.5 percentage points in 2021 compared to 2011.

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CMHC also calculated that between 2011 and 2021, 913,000 Canadians aged 45 to 84 moved from homes with three or more bedrooms to smaller homes, but still found that the downsizing “continues to affect a minority of older households in the United States.” Canada remains restricted”.

“In other words, these results appear to indicate that a large portion of senior households (particularly younger ones) are choosing to age in place rather than put it on the market,” CMHC said. “The big question is whether older households will follow in the footsteps of previous generations or go their own way in the coming decades.”

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