The tight real estate market is one of the biggest factors in the sky-high housing prices in most of Canada’s major cities. And it appears the real-estate wealthy Boomers are to blame for yet again disrupting markets.
More than 20 percent of Canada’s population will be 65 within the next five years. Many Boomers are still working and they are healthier than previous generations, so they aren’t yet ready to move into retirement communities or nursing homes.
Although the trend had already started and has been well-documented in the United States, the COVID-19 pandemic has exacerbated the problem in Canada, according to Engel and Volkers in their new 2021 year-end real estate report. Boomers witnessed the tragedy that occurred during the pandemic in Canada’s long-term care and retirement facilities and is wary of that future.
A 2020 Royal Society of Canada report that looked at long-term care in Canada during the early waves of the pandemic, highlighted its ruinous state. Canada experienced a far higher proportion of total country COVID-19 deaths in nursing homes than other comparable countries — 81 percent in Canada, compared to 28 percent in Australia, 31 percent in the US, and 66 percent in Spain..
By March of 2021, more than 50 percent of all deaths from COVID occurred in nursing and seniors’ homes, according to the Public Health Agency of Canada.
Hitt says Boomers are deciding to renovate or hire private help inside their homes. “Because of equity accrued in their homes, many can hire private help to ensure they can stay in the homes they own in communities they love for as long as possible.”
Almost two-thirds of local markets were sellers’ markets, and there were just 1.6 months of inventory on a national basis at the end of December 2021 — the lowest level ever recorded by CREA.
A report by the Bank of Nova Scotia found that Ontario, Alberta, and Manitoba have the lowest housing stock per capita.
Yet another factor cited in the trend for Boomers to stay in their homes has been the rise in reverse mortgages. Canadians aged 55 and over are able to draw on a portion of their home equity to boost their liquid income while staying in their homes.
HomeEquity Bank, a major provider of reverse mortgage products in Canada, recently disclosed that the country’s homeowners are now carrying more than $5 billion worth of its reverse mortgages, the largest amount ever.