Why Retiring Baby Boomers Hold The Key to The Future of Housing Prices in Canada

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Let’s face it, with the world’s financial markets in free-fall one day and soaring the next, and the impact of the largely American sub-prime meltdown on the Canadian real estate market still uncertain, it’s not surprising that many current and aspiring homeowners have decided to wait out the turmoil.

But there are other factors that will also have a major effect on the future of home values for Canadians. These include the gyrating price of oil, the performance of the U.S. economy, and potential military conflict with Iran.

All of this makes the timing of your decision to sell more complex than perhaps at any other time in history.

And now you can add to this confusion yet another looming crisis, the end of the “generational housing bubble”.

According to a recently released study by Dowell Myers and SungHo Ryu of the University of Southern California, the housing market is poised to change dramatically as 78 million baby-boomers retire in the U.S.

David Foot, author of Boom, Bust and Echo predicts that Canadian boomers in their 60s and 70s who will be retiring in large numbers, will still place tremendous demands for goods and services. Also, economic growth will be slowing down quite noticeably.

Since the mid-to-late seventies, baby-boomers have essentially driven the marketplace. But as the first wave of them retires, their involvement will decrease substantially. Young adults will instead make up the bulk of new demand for housing.

The big question is … with the expected flood of real estate boomers selling their homes, will the younger generation be able (or even willing) to purchase it, especially in a drawn-out buyers’ market?

While our population numbers are not the same as those in the U.S., there are many signs that point to a similar outcome for the Canadian housing market in the next five to fifteen years.

So, if you’re a Canadian home owner, especially in any of the Central Toronto neighbourhoods, and you believe that housing prices will continue to go up as they have in the past ten years, the impending bursting of the generational housing bubble should definitely be “food for thought”.  

In my twenty-five plus years helping home buyers and sellers in central Toronto, I have experienced my share of slowdowns, recessions and market uncertainty.  

Unsure as to what to do in this market? Simply send me an email, or call me: Rosalin Smith-Carr, at my direct line (416) 482-8330 ext. 3519