Over the next decade, it’s expected that society will experience a significant shift in housing demands. The reason for this is that the Baby Boomer generation (9.6 million Canadians) and Generation Y (9.2 million Canadians) are the two largest demographic cohorts who represent over 56% of the Canadian population. Future housing demands from these two groups are expected to be diverse. On one hand there is the baby boomer generation who are starting to enter their retirement years and are expected to downsize from their current home. On the other hand there is generation Y who are just entering the housing market.
As the boomers begin to retire they’ll likely be looking for smaller and more maintenance free housing. According to research, 4 out of 5 boomers plan to a smaller home. Generation Y, many who are just starting out or finishing post secondary will be seeking housing that’s more affordable. These factors are part of the reason why we are experiencing a demand for smaller housing, from single detached to multi-family homes. Another important factor influencing this demand is household formation. The boomers and generation Y are the main cohorts behind the rapid growth in single and two-person households, which have become the fastest growing household types. Much of this has to do with more boomers becoming empty nesters and an increasing portion of generation Y delaying marriage and having families.
A shift in demand for smaller housing is not the only change that is happening. Research has indicated that an increasing proportion of boomers and generation Y are interested in in living in communities that offer high level walkability or have a ‘urban’ feel to them. A survey found that younger first time buyers concluded that 64% preferred urban locations versus 50% of those 55+. This trend is already apparent given the increasing demand for housing in urban neighbourhoods and suburban town center.
One conclusion that can be drawn from this is that housing will need to evolve in order to remain attractive and to appropriately respond to changing household formations. The one size fits all does not exist any more. Diversity is key.
Source: Property Biz Canada
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