Seniors staying in their homes longer, says CMHC

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Only a ‘minority’ of older Canadian households are opting to downsize

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Canadian seniors are opting to remain in their homes for longer, a new report from the Canada Mortgage and Housing Corporation has found, suggesting that those looking to buy into the housing market should not expect a flood of supply from elderly homeowners any time soon.

The report, released by the CMHC Nov. 15, tracked the housing habits of different cohorts of Canadians, divided 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 years old at the time of 2021 census and bear an outsized demographic impact.

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

Currently, the sell rate among the 75-79 age group, just outside the first boomer wave, is 21.5 per cent.

The figures suggest the housing market will have to wait for when this cohort hits their 80s — when the sell rate hits 36.6 per cent for those aged 80 to 84 — to see supply enter the market.

“In Canada, the proportion of elderly households who sell their property is elevated only in relatively advanced age groups,” the report found. “It will therefore take another few years to see a truly significant proportion of elderly households list their properties for sale.”

Canada’s population is on the verge of a major demographic shift with the number of older households poised to rise “significantly” over the coming years. Meanwhile, the country is experiencing a severe housing shortage, with the CMHC estimating the country needs to build an additional 3.5 million homes on top of current construction rates by 2030 to close the affordability gap.

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The housing options older Canadians chose will have spillover effects into the market, CMHC noted.

If they opt to stay in place longer that means there will be fewer single family home available for younger generations. But moving to a condo and or rental could also increase the prices of those forms of housing, adding to affordability issues for people in lower economic groups.

While condominiums are becoming more popular with seniors, the CMHC found that “actual movement toward this type of housing is quite limited.”

In 2011, out of all owner households in Canada in the 65-to-69 age group 12.3 per cent had a condominium. A decade later, condominium ownership rose to 17.4 per cent among the same group now aged 75-79.

“These results therefore suggest that condominiums become more attractive to Canadian owner households as they get older. This being said, the movement toward condominiums seems limited, since the proportion of condominium owners rises only a few percentage points over 10 years,” the report said.

The number of people who rent, meanwhile, rises with age, but the trend is less pronounced among younger seniors.

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Further, only a “minority” of older Canadian households are opting to downsize.

Among the reasons cited for the slow rate of 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 need to sell to finance their old age, and homeowners have more housing types to chose from.

For example, 12.1 per cent of people aged 60-64 in 2021 owned a one-bedroom home, up from 10 per cent in 2011 at the age of 50-54. Almost one quarter of the 60-64-year-olds in 2021 owned a two-bedroom compared with 21.1 per cent of those aged 50-54 in 2011. The biggest drop in downsizing was recorded in the four-bedroom home category where ownership fell 3.5 percentage points in 2021 from 2011.

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CMHC also calculated that between 2011 and 2021, 913,000 Canadians between the ages of 45 and 84 moved from homes with three or more bedrooms to smaller homes, but nonetheless found that downsizing “remains confined to a minority of elderly households in Canada.”

“In other words, these outcomes seem to suggest that a large proportion of senior households (especially younger ones) are deciding to age in their home rather than put it on the market,” CMHC said. “The big question is whether, in the coming decades, elderly households will follow in the footsteps of previous generations or go their own way.”

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