20 - 24% of our Population in Canada will be Seniors by 2035

WHAT AN IMPACTFUL STATEMENT!

By 2035 the number of seniors will swell to 22 - 24% of population.

And a high-growth scenario sees the number of Canadians swelling to 63.5 million.

The scenarios differ in their assumptions about future immigration levels, fertility rates and longevity. For planning purposes, the most sensible approach is to use the medium-growth scenario, which points to a national population of roughly 50 million a half century from now.

In all scenarios, the proportions of senior citizens within the population – defined as people aged 65 and over – edges higher. From 15.3 per cent today, the ranks of Canadian seniors will expand to comprise 22 to 24 per cent of the population by the early 2030s.
http://www.newsoptimist.ca/article/20141029/BATTLEFORD0304/310299999/0/battleford03

These are incredible numbers! With a population of  60 million people in Canada  (2035) 24% will be drawing a pension.    What else will they do differently?

• Buy fewer clothes
• Buy fewer houses
• Buy fewer Cars
• Livelonger off Pension Income
• Hold Houses Longer

There will be a spin off reduction in all things that are consumer based products as the seniors become more shut in.

So what are some solutions?

That's all they can afford to pay..... Toronto Real Estate Crisis

Preamble

Widow with 3 adult sons remained in the family homestead of 40 years.  The growing needs of being a senior now require a single floor for mobility and less snow shovelling or house / lawn maintenance. Its expensive to heat the 4 bedroom house for one person. She expressed her interest to change to a condominium with her BFF [who was previously a REALTOR ® ] Smartsizing*   

There was a swift introduction to a Friend of the BFF. [bird dog]

He took her out a few times to look at condos, and then reminded her that she was obligated to him.  The sons are all past clients of mine.  The sons recommended that she contact me about her needs.

BUT ... She felt obligated.

They settled on a condo unit and a closing date. The home was listed for sale at $XXX.   Toronto, Ontario, Canada's real estate market for detached homes is firmly a SELLER's Market. After a few days on the For Sale, he asked What will you take...    What's your final price.  What's your lowest price?

She finally responded to the questions with...  "I will not take less than $YYY"

An offer from a showing appeared exactly at $YYY and the agent sheepishly added;

But thats all they can afford to pay....

The agent double dipped the seller on the detached home and sold a condo.

The family suspects that the Widow [their Mom] was shorted [duped] out of about 10% of the homes value by an unscrupulous agent. We all want a trust relationship, transparency and fiduciary duty to our clients. Mom doesn't believe she was manipulated.

"Happy Buyer" and a "Happy Seller" means that there is no ethical complaint against this realtor.  BUT should we sit by and permit this?   We talk about raising the bar in real estate transactions then find stories like this are more common.

What would you do?

Housing Trends - Millennials

This is such an articulate explanation of Millennials, Boom Bust and Echo and emerging need to Seniors housing I just want to quote the entire article.

Since 1921, the largest annual increase in the number of births occurred between 1945 and 1946, with an increase of about 15% and marked the start of the baby boom period. The largest relative decrease (-8%) occurred between 1964 and 1965, marking the end of the post World War II baby boom.
During the 20 years of the boom, more than 8.2 million babies were born, averaging close to 412,000 a year. By comparison, births in 2008 — when the population was twice as large as during the baby boom — amounted to 377,886. The average number of children per woman was 3.7 during the baby boom period, compared to about 1.7 in recent years.
According to the 2011 Census, 9.6 million persons, or close to three Canadians out of 10 (29%), were baby boomers. In addition to the large number of native births between 1946 and 1965, this generation has benefited from sustained immigration levels since the end of the 1980s.
Considerable research has been undertaken regarding the potential housing market impacts going forward of the “baby boomer” generation. Trends anticipated by various researchers and commentators include:
Possible adverse impacts on home values in some newer neighbourhoods, more distant from the downtown core and/or suburban employment centres, based on more existing units coming onto the market at the same time;

• Increased demand for smaller units and/or condominium units in “walkable” neighbourhoods that involve less commuting;

• Higher housing prices in established neighbourhoods that may effectively reduce opportunities for most “Millennials” or “Gen Y” home buyers;

• Different kinds of housing demand based on values and experiences of “boomers” compared with both older and younger generations; and

• Increased intensity of local debate over urban growth in cities because retired boomers have time, money, and skills to engage.

A study from the Conference Board of Canada predicted that by 2030 about 80% of new housing demand would be consumers in their retirement years. It would bring a new wave of homes that are low maintenance, such as condominiums or seniors residences. At the same time the shift would put downward pressure on prices of traditional single-detached homes.
Those same boomers, when they were in their 20s in the 1970s, helped drive the market to new heights with new housing starts reaching a record 274,000 in 1976. Then it was the boomer’s children, the “echo-boomers”, who helped drive the market last decade as they began forming households. Now, it’s going full circle with boomers downsizing. In 2006, 57% of condo owners were over the age of 50 while 17% were over the age of 75.
Several commentators believe that equity and house prices may be adversely affected by baby boomers as they reduce purchases and sell holdings during their retirement years. But the perils of relying on demographics alone to predict house prices were illustrated early on. In 1989, the much-discussed paper, “The Baby Boom, The Baby Bust and The Housing Market” by N.G. Mankiw and D.N. Weil, analyzed demographic factors. They predicted U.S. real house prices would fall by 3% annually between 1987 and 2007. Instead, they rose by about 4% a year.
In demographics expert David K. Foot’s 1996 book, “Boom, Bust and Echo – How to Profit From the Coming Demographic Shift”, the real-estate decline of the early 1990s was projected to continue over the long term. He posited this because he believed most boomers had already acquired their houses. The “baby bust” generation following them did not have the numbers to pick up the slack. Instead, housing activity picked up again in the 2000s, as immigration, migration within Canada, and a resurgent economy drove new residential growth.
Estimating the long-run rate of return for Canadian home prices is also affected by the baby boomers. The Canadian Home Builders Association projects a 3.5% annual rate of return on real estate to prevail beyond 2015 — this is the long-run rate of increase for home prices in Canada. In other words, home price gains should simply match the pace of inflation. The long-run rate of return for home prices is primarily driven by macroeconomic fundamentals, such as income and economic growth, and demographics (e.g., population and household formation). Structural changes, including an ageing populace and the number of immigrants as a share of total homebuyers, could influence real estate returns. However, the literature is mixed on whether these changes represent an upside or downside risk to the 3.5% status-quo projection.”
Research primarily undertaken in 1980s and early 1990s showed that when people retire they tend to remain in their existing home until they die or are unable to care for themselves. Baby boomers are the healthiest and wealthiest generation in history and can afford the broad range of services necessary for them to continue this trend and remain in their single family homes for as long as they wish. This projected longevity will keep many of their homes off the market for decades and increase the projected demand for additional land requirements through urban boundary expansions. There is only one certainty about the impact of baby boomers on future housing markets — that it will be spread over a period of 20 years. It is therefore unlikely that it will generate any unmanageable shocks to the structural or financial market underpinnings.   http://www.ottawasun.com/2013/09/20/baby-boomers-and-housing-trends

The big elephant in the room is the liability that our political leaders have had time to prepare;  adequate housing and nursing care for seniors.

David Pylyp
Accredited Senior Agent

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