Canada is famous for remarkable cities with fascinating natural surroundings. No wonder why there's such a great demand among homebuyers. A recent study shows that Canada's baby boomers are the new consumer power behind the surging luxury housing market in some cities. Many baby boomers are cash rich and ready with down payments so that their children can afford an expensive luxury home. The study also says that middle-class baby boomers are helping out their children with the down payment for homes in every price range.
Home sales worth over $1 million are booming in Canada's big cities. Homes in the Vancouver area sell for $3 to $4 million. Recent study data shows that a majority of young buyers are investing in properties priced at over $800,000 with help from their parents. Economic forces do not shape the luxury real estate market, it's driven by generational values and demographics. Canada has 9.6 million people born between 1946 and 1965, constituting 30% of the total population. These baby boomers are in their 50s and 60s with annual incomes in the range of $300,000-$500,000. According to mortgage insurers, baby boomers are sitting on a large pile of collective wealth drawn from inheritances from their parents and from years of working, especially in cities like Vancouver, where homes have hugely appreciated in value over the past 25 years.
Right-sizing trend: luxury home sales are driven by 'right-sizing', which means baby boomers are opting for homes with spacious rooms to accommodate their adult children or their elderly parents. Given that baby boomers and their elderly parents can afford the price for traditional luxury neighbourhoods in Vancouver and Toronto, this trend isn't very surprising. Right-sizing implies, buying of an average 3,000-square-foot condo or a bigger home in a better neighbourhood, with room for elderly relatives or elderly parents may be living with them.
Source: Money Solutions
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