GTA seniors delaying downsizing, putting housing squeeze on younger people: study
A growing trend among Toronto-area seniors to delay downsizing efforts and remain in their homes for longer could indicate future housing pressures for younger generations, a new report said Thursday.
The Canada Mortgage and Housing Corporation analyzed 10 years worth of housing data among residents of the Greater Toronto Area aged 65 or over, evaluating how many opted to remain in the real estate market.
The report found that seniors were more likely to be home owners in 2016 than they were in 2006, noting they made up 25 per cent of local homeowners compared to 20 per cent a decade before. Report author Inna Breidburg said the shift bucks long-standing demographic trends that typically see seniors exiting the real estate market as they age, freeing up homes for young people to take over.
“Housing is a continuum,” Breidburg said in a telephone interview. “If seniors don’t sell their homes, eventually it limits supply for all further generations … It has implications for the entire market.”
Breidburg said the trend that could pose problems for younger homebuyers is a positive one for seniors, citing a number of factors behind it.
Seniors staying in the workforce longer
She said national data shows a growing number of seniors are remaining in the workforce for longer, contributing to higher levels of income.
Statistics Canada mapped out that shift in the 2016 census. The agency found 53 per cent of men and 39 per cent of women over 65 were working in 2015, up sharply from 38 per cent and 17 per cent respectively in 1995.
Breidburg’s report also found the net worth of Toronto-area seniors had risen in the past decade, citing employment incomes, retirement savings instruments and government support programs as contributing factors.
Greater financial means, combined with better overall health, leave a growing number of seniors feeling able to maintain their homes, she said.
But Breidburg said conditions in the city’s over-heated real estate market may also be playing a role, noting that not all deferred downsizing plans are voluntary.
More ‘want to age within their communities’
“We found that more seniors want to age within their communities where they know friends and family,” she said. “But because limited options are available for them, they stay in their homes longer.”
Breidburg said lack of appropriate options can include a dearth of smaller homes as well as a shortage of affordable options, citing the supercharged real estate conditions that have made Toronto-area home prices among the highest in the country for the past several years.
On Tuesday, the Toronto Real Estate Board issued a report pegging the average July home sale price at $806,755. That figure was up 3.2 per cent from the same time the year before and reflected a 24.3 per cent boost in year-over-year sales.
The Canadian Real Estate Association’s latest market forecast released in June projects that the national average price will drop 0.6 per cent by the end of this year to roughly $485,000.