Tag Archives: Baby Boomers

Condo Market: Demand For Condos Grows Upward and Outward

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Condo Market: Demand For Condos Grows Upward and Outward

The proliferation of condominiums across Toronto and the Greater Toronto Area has been astounding over the past decade. Purchasers span the gamut from first-time homebuyers who find detached residences out of their financial reach, to professional couples, families, empty-nesters and retirees, all seeking the convenient lifestyle condos offer.

Once relegated to the City of Toronto, condominiums are popping up all over the GTA as well. The Altus Group statistics from July 2018 released by BILD show that there were 1,284 new condominiums sold in Toronto, while the total for Durham, Halton, Peel and York Regions was 795. Now, it looks as though this trend is spreading out to places beyond the 905 areas.

This is especially true for baby boomers. The Royal LePage Boomer Trends Survey (https://bit.ly/2KFIahg), released on August 8, shows that more than 1.4 million baby boomers (born between 1946 and 1964) plan to purchase a new home in the next five years. Over half of the people surveyed consider their current local housing market unaffordable for their retirement years, and 32 per cent responded that they will likely buy a condominium.

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The survey indicated that in Ontario, nearly half of the respondents said they hope to move to a smaller home to downsize (or as I prefer to say, right-size) their lifestyles. Most boomers in Ontario have a preference to moving into a smaller detached home, yet 46 per cent said they would consider a condo. With 40 per cent saying they would be willing to move to a new city or suburb for more affordability, Ontario has the highest rate in Canada. In fact, 32 per cent of those respondents would even consider moving more than an hour away from where they currently live.

Greater Toronto Area developers who have been focusing on building condos in the 905 areas will likely find this trend agreeable, as boomers move from homes in urban Toronto to locations that offer affordability and a more laid-back lifestyle. Places such as Barrie, Innisfil, Peterborough, Grimsby, Orillia and the like will probably see their condominium rosters increase with new buildings.

We tend to read a lot about first-time homebuyers turning to condos for affordability, but a lot of this trend has to do with boomers discovering the retirement savings they thought would carry them comfortably into the future will not take them as far as they thought, in the style to which they are accustomed. Plus, nine per cent of the total boomers surveyed expect their children to stay at home until after the age of 35, which adds to their dilemmas. It is easy to understand why condominiums are in such demand with this demographic.

This also supports my continual comments that condos are a driving force in the housing market and will continue to be for quite some time.

BARBARA LAWLOR is president and CEO of Baker Real Estate Incorporated, winner of the pinnacle 2017 Riley Brethour Award from BILD, and an in-demand columnist and speaker. A member of the Baker team since 1993, she oversees the marketing and sales of condominium developments in the GTA and overseas. Keep current with The Baker Blog at blog.bakerrealestate.com

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Perspectives: A Baby Boomer Shaped Hole

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Perspectives: A Baby Boomer Shaped Hole

Shrinking condo sizes and skyrocketing prices are pricing downsizers out of the market

For the first time in the history of Canada, the number of people aged 65 years or over now surpasses the number of children aged 14 years or under. This unprecedented demographic shift means that the market is beginning to be flooded with affluent 65-plus baby boomers looking to downsize from their large family homes.

In the next five to ten years, even more baby boomers will be retiring and looking to downsize, so in many ways the baby boomer is the perfect customer for savvy developers to be targeting right now. Unfortunately, a combination of poorly designed policies and untimely market forces have severely limited the affordable options available to this highly coveted buyer.

While the idea of maintaining a two-storey home in retirement seems like a viable option for some retirees, home upkeep and mobility concerns in homes with flights of stairs are driving many baby boomers towards large-sized condominiums.

There’s just one problem: trying to find an affordable living space that can comfortably accommodate a downsizer is still almost impossible. This is true not only for the existing stock of condominiums, but also for new developments coming to market.

As a condominium sales and marketing consultant, I have the opportunity to meet with several developers on a weekly basis to see firsthand what the current market trends are. While many developers are doing an excellent job at creating products to meet the needs of young professionals, the current design and suite mix across the city is simply not well situated to meet the needs of the baby boomer demographic.

Ironically, a large part of the problem stems from the way the city has been pushing for more multi-bedroom suites. At first this might sound like a good thing until you look at how they are doing it.

It all starts with development fees. They are a huge source of revenue for the city, and they are levied based on how many bedrooms a suite has. The difference in development fees between a one- and two-bedroom suite can be as much as $10,000.

Under the current system, a developer may design a 650-square-foot onebedroom- plus-den suite, only to have the city come back and tell them that they will be charged a two-bedroom suite development fee for that suite layout. This means that the developer will have to redesign that suite so that it can be marketed as a two-bedroom unit.

Because this trend of pushing for more bedrooms is happening across the city, it means the average square footage for one- and two-bedroom suites is going down. At the same time, suite pricing is strongly tied to the number of bedrooms, so this phenomenon is also driving the cost per square foot up. The end result of these market and policy forces is that the average baby boomer is getting pushed out of the condo market.

Imagine you are a retired couple currently living in a 3,000-square-foot home worth $1.5 million. You want to downsize to a 1,500-square-foot condo that is easier to maintain but still gives you enough space to have the kids come to visit. The average cost for a downtown condo of 1,500 square feet is almost exactly the same price as their current home. This means that they are getting half the square footage for the same price. Not much of an incentive.

I recently met one downsizing couple who did the math and thought it would be better value to spend $50,000 installing an elevator so they can stay in their home as they age.

A related issue in the lowrise market is that developers are not building bungalows, either. This is mainly because the cost of land has increased so much, a 2,400-square-foot home in King Township would cost in upwards of $1.2 million. Land has now become so much of the cost of building that a two-storey detached home in the same community, on the same lot size, would cost essentially the same. Where can one retiring find money to live on if they are paying so much more to downsize?

Back in Toronto’s highrise market, we see another problem. The current inventory of larger luxury condo suites are simply not priced to sell. There are some developments that have suites over 2,000 square feet priced anywhere from $3 million to $5 million, plus the cost of monthly maintenance fees. This is simply not an appealing option to many people who could own a very nice Toronto home for much less than this.

The solutions to these problems are complex, but developers and municipalities will be wise to consider them carefully. With over 23 per cent of the population retiring in the next 10 years, the time is now to find solutions that will appeal to this near ideal target buyer.

Vanessa Bellemare is vice president of sales and marketing at International Home Marketing Group. IHMG.ca

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Baby Boomers Staying Put

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Baby Boomers Staying Put

One chicken-and-egg factor that’s contributing to the continual rise in housing costs in Vancouver, Toronto, and other neighbouring urban centres is that parents of 20- and 30-somethings aren’t downsizing when their kids move out. Why? Because their kids aren’t moving out – or are moving back in after giving up on trying to buy their own homes. Faced with their kids having to move to far-flung suburbs or beyond, parents are staying put instead of putting their houses back on the market. The upside for readers is that as realtor’s fees, land transfer taxes, and other costs continue to skyrocket, homeowners are more likely to improve than move.

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Condo Market

Condo Market : There Is A Condo In Your Future!

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Condo Market : There Is A Condo In Your Future!

With the widespread appeal, relative affordability and increase in choices of condominiums across the Greater Toronto Area, I feel confident in saying that the title of this column is true for a large percentage of our population.

If you are an empty-nester and/or retiree, you likely agree. Baby boomers are aging and retiring at unprecedented rates. For many, single-level living with no exterior and common area maintenance seems like a great way to accommodate their current needs. This market has long been attracted to condos for those reasons. Today, there is the added benefit that they can cash in on the equity they’ve built up in their lowrise homes and bank enough to travel and enjoy life.

If you are young, you may wonder why I am so certain that there is a condo in your future. The market has been flooded with first-time home buyers who understand the wisdom of owning rather than paying out high rents. Nowadays, with lowrise prices being unattainable for most first-time purchasers, they have turned to condominiums as the affordable choice. You also have a couple of things in common with older buyers. For one, you all desire the time freed up by having maintenance taken care of for you. Today’s young professionals are frantically busy, and leisure time is elusive.

For another thing, all condo owners appreciate having beautiful amenities under their roof and on their rooftops. This eliminates long drives to fitness centres, recreational facilities, banquet facilities and even theatres. When all of this is just an elevator-ride away, the convenience is incredible. Even those who purchase the most compact of suite in a residence can still entertain friends in the building’s theatre, party room, billiards room, rooftop garden, etc. Condos are also located close to public transportation; many are in downtown Toronto. Urban professionals who live there have a quicker work commute, and some may even be able to walk to their place of employment.

Single women and families also thrive on the knowledge that condo living is relatively safe, as there are security measures built in, along with having the concierge there to keep track of who is entering and leaving the building. Families are grateful that Toronto and the GTA have good school systems, and every municipality is dotted with natural areas such as lush parks. Even in the heart of Toronto, you can walk your dog and take the kids to the park to play.

Consider, too that some parents are buying condo suites for their grown children to live in while attending university, and then selling them at a profit later on. Investors have taken to condos as part of their financial portfolios and contribute to the need for rental options in the city. The demand is so strong, that condominiums will be extremely desirable for years to come.

I may not be a fortune-teller, but after many years in the industry, I feel confident saying that whatever your life circumstances at the moment, there is probably a condo in your future.

BARBARA LAWLOR is president and CEO of Baker Real Estate Incorporated and an in-demand columnist and speaker. A member of the Baker team since 1993, she oversees the marketing and sales of condominium developments in the GTA and overseas. Keep current with The Baker Blog at blog.bakerrealestate.com

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