Almost a third of Ottawa’s population is made up of baby boomers. If you are between 56 and 74, you are part of that cohort and wielding an economic influence, yet again; this time in Ottawa’s real estate market.
“There are more millennials, but of those millennials only half are in their home-buying years,” says Taylor Bennett, a CTV contributor, and broker with Bennett Property Shop Realty.
“With one of the highest baby boomers rates per capita in the country, the baby boomers transitioning into their retirement years will impact Ottawa's real estate market more than most cities.
The city saw an impact back in the 1980s, when many boomers were starting families and moving into larger suburban homes. Real estate prices in Ottawa climbed by nearly 50 per cent between 1982 and 1984, Bennett said.
Bennett’s team divides the housing cycle of Boomers into three phases.
In the first phase, buyers are looking for a smaller dwelling, with a focus on convenience and cost.
In phase two, the Boomers were focused on a larger home for the ‘family phase.’At this time, according to Bennett, buyers are looking for schools and safety.
“Phase three is what we call Retirement Phase. People are downsizing and mainly focused on reducing maintenance and costs.”
Average Retirement Age in Ottawa: 65
“With the average age of retirement in Ontario being 65, baby boomers are right in the middle of their ‘phase three’ retirement phase. However, in Ottawa, our baby boomers are a little younger than the provincial average by about 5 years, and for every baby boomer over 65, there are approximately 2 under 65.”
Bennett says, “So if you are approaching your retirement age, you may want to start planning earlier than you think - with record-low inventory it can take much longer to find a home suitable for your needs.”
There are some clear trends for those boomers in Ottawa, Bennett says. Many still work on contracts or in consulting with reduced hours.
Bennett is seeing a shift in interest to smaller towns, with improved amenities.
“We see a desire to move back to a smaller hometown, often outside of the city. There is also a trend toward downsizing to a condo or retirement home and sometimes home renovations to add an income suite."
Since 1950, the life expectancy in Canada has increased by 35% from 68 years old to 82 - meaning there are more retirees and downsizers than ever before; this influx is being playfully referred to as the ‘Silver Tsunami,’ says Bennett.
“Because of this, we have seen many different retirement trends take hold. It’s not surprising, to see many baby boomers move to a more rural area, where home prices are lower and the pace of life is a little slower, or for some who prefer to be in a more urban setting - downsizing to a condo or into a retirement home. "
Now, though, boomers and millennials are hunting for the same properties.
“There is a generational shift. It is a very interesting time right now. We’re in an unprecedented time,” explains Bennett.
“We have the largest two demographics in the city essentially competing for the same styles of property for the first time ever.”
“Typically we have properties outside of Ottawa for those are downsizing. They are were ‘retiree friendly’ and the downtown condos were typically for your young buyer, for first time homebuyers but now we’re seeing a crossover. We are seeing some of the younger people move outside of the city and some of the downsizers are picking up condos. We are seeing a lot of cross pollination.”
“As the Millennials enter into their home-buying years, they are looking for similar style condos to fit their lower maintenance lifestyles, increasing the demand and cost of condos.”
Bennett also explains how COVID has had a significant impact on these changes.
“More people are working from home causing the demand to increase in the towns surrounding Ottawa. So, that has some Baby Boomers are considering staying where they are and renovate to reduce their home maintenance level and/or to add income-generating elements such as an in-law suite to help with the costs.
“And since the baby boomers are the most affluent generation we have ever seen, if home maintenance becomes too daunting, many have the option of paying for maintenance--snow removal, landscaping, etc... in lieu of moving.”
Bennett’s tips for baby boomers: Plan ahead and reassess your retirement plans
“With COVID having changed so much in our lives, it's no question it has also changed the retirement plans for many people. As telecommuting becomes an option for many workers, this has enabled many Baby Boomers to expedite their retirement plans by being able to work from almost anywhere.”
“Plus, in Ottawa, for every Baby Boomer over 65, there are two under 65, which means there will be more people entering their retirement years than ever before.”
“If you have yet to buy your rural dwelling, cottage or condo to use as your retirement property, start ASAP. Inventory levels are at historically low and more downsizing buyers are entering the market than ever before, so it can take far longer to find the right home for you and more downsizing buyers will be entering the market within the next few years.”
Taylor and Marnie Bennett host the “Bennett Real Estate and Wealth Show” on 580 CFRA, Wednesdays at 7 p.m. and Saturdays at 1 p.m.