A recent study has debunked the historical predictions of an oversupplied housing market caused by a mass evacuation of baby boomers from their residential homes.
Urban Figures’ report, Trends in Housing Occupancy Demand, found that Canada will actually need another 4.5 million homes for incoming generations in the next 30 years, as baby boomers remain in their homes.
“The boomers, who are in their mid-50s to late-60s, are all still in their homes,” said Andrew Ramlo, executive director of Urban Futures. “There has been no necessity for the buster [generation] to replace them because they’re still clogging up the housing market, especially in family-style housing.”
Ramlo added that this phenomenon should not impact housing prices. “If we have a growing population and more people that need to be housed, it shouldn’t push down prices because supply will not start to exceed demand in that context,” he said.
Asides from building another 4.5 million homes in the next three decades, Ramlo has suggested that easing baby boomers out of their residential properties to make room for the next generation could be done through supplying them with the alternative.
“If you want someone to downsize out of their single-family home, you have to give them an alternative in their community,” he explained. “My parents, for example, didn’t have a great attachment to the bricks and mortar, but what they were attached to was the community.
Ramlo believes that as long as supply and availability of alternatives to the single-family home start to get added into some of those communities, the prominence of downsizing will increase over time.
The immense value of many of these boomer-owned residential properties could also push that generation to finally put their homes on the market.
For example, someone who lives in Dunbar, Vancouver and has done so for the last 20 or 30 years is now sitting on a multi-million dollar property that they likely purchased for $30,000 or $40,000.