Downsizing used to be a big trend among seniors, but not anymore. A new report reveals the older generation is actually staying in their homes for longer.
The report by the Canada Mortgage and Housing Corporation (CMHC), released Thursday, specifically looked at residents aged 65 and over in the Greater Toronto Area. They analyzed this group’s housing data over a 10-year period to determine how many stayed in the real estate market.
In 2006, seniors made up 20 per cent of homeowners in the GTA compared to 25 per cent in 2016, the report found. Although the increase is small, this shows that more seniors are delaying downsizing.
“We found that more seniors want to age within their communities where they know friends and family,” report author and CMHC senior economist Inna Breidburg told the Canadian Press. “But because limited options are available for them, they stay in their homes longer.”
Breidburg is referring to the fact that the market is tight and homes have become more unaffordable over the years. Currently, the GTA housing market is just shy of becoming sellers’ territory, new data from the Toronto Real Estate Board reveals. As a result, the average home price has increased by 3.2 per cent to $806,755.
But for some seniors, delaying downsizing is a choice rather than a forced decision. Not only are more seniors working past retirement age, but they're also making more money. The median household net worth for seniors jumped from $505,700 to $875,000 in 10 years. A higher income means they are more capable of maintaining their home as they age.
But unfortunately, the trend of delayed downsizing will have a direct impact on the younger generation. “Housing is a continuum,” Breidburg said. “If seniors don't sell their homes, eventually it limits supply for all further generations ... It has implications for the entire market.”
Seniors make up a big portion of the Canadian population. Today, there are more seniors than kids living in the country, according to Environics.
Although CMHC data shows seniors in the GTA are staying put, a previous analysis by Point2Homes suggested this isn't the trend across Canada.
The latter report found more seniors in Canada are actually downsizing closer to city centres. The thought is that they’d have greater accessibility and be closer to their families. However, this Canada-wide trend also has implications for today’s youth as it means more competition with millennials over more affordable homes.