Not so fast. Canadian seniors are a long way from ready for retirement homes. Only a small percentage of younger seniors are opting for some type of institutional setting but a tsunami is coming when they hit 80.
Millennials hoping for a break in the housing market as seniors move into retirement homes may have to wait a while, says a new report.
The “tsunami” in demand for retirement and nursing homes will not happen until the boomers reach their 80s, said the report by Toronto-based real estate consultants Altus Group.
Based on the 2016 census, Altus data shows single family homes — including detached, semi-detached and townhomes — were the preferred option by 71 per cent of the population aged 65 to 74. Another 27 per cent were living in apartments with the rest in some sort of collective living that could be a senior residence or a full-on retirement home.
“We call 65 senior, but part of the point is that at 65-74, you are still pretty young,” said Patricia Arsenault, executive vice-president of research consulting services with Altus, and author of the report.
Altus found that as seniors age, they begin to move out of their homes into collective dwellings, but the process is not happening in dramatic way until they reach 85. In 2016, even among those 75 to 84, 61 per cent lived in a single-family home while 31 per cent lived in apartment building.
“Even if you go back five to 10 years, there is not much of a difference,” said Arsenault. “The propensity to live in a collective setting just has not changed much.”
In the 85-years-and-older category, only 32 per cent of the population lived in a collective setting, up marginally from 31.1 per cent in 2011 and 29.9 per cent in 2006.
The good news for retirement home operators is the sheer size of the boomer age group means the actual number of seniors living in collective dwellings is growing, with 500,000 Canadians fitting that description in 2016, more than half of them aged 85 or over. Between 2011 to 2016, the number of seniors living in collective dwellings grew by 63,000.
“The increase…is entirely attributable to the expanding size of the seniors population base, which more than offset the modest decline in the overall incidence of living in collective dwellings,” according to the report. “The tsunami in demand for retirement and nursing homes, however, will not begin until baby boomers start to reach their 80s.”
Arsenault said people generally want to stay in their homes and, increasingly, support systems are in place to allow this to happen. “The Ontario government is certainly providing support services,” she said.
There is some upside for millennials hoping for those boomers to move. “There are opportunities for more move-down product, adult lifestyle products — the younger seniors,” Arsenault said. “We are finding some of the demand in other areas outside the (Greater Toronto Area) is people cashing in from their house in Toronto. They are moving to areas outside (the city) and maybe not necessarily to smaller homes.”
Some of those downsizing could be doing so to deal with debt as 17 per cent of those 65 or over still have a mortgage. Among those 65-69 age group, 21 per cent still have a mortgage.
