Boomer homebodies I
Selling the family nest never an easy decision for homeowners
t’s the last conversation certified financial planner Lise Andreana usually has with her clients.
The Niagara- on- theLake, Ont., CFP, who counts a large number of Baby Boomers among her clients, says plans for the family home are one of the more difficult subjects to address.
“It’s something that comes up all the time,” says Ms. Andreana, who says clients sometimes have to make the decision for financial reasons and other times because of health considerations. “It’s a piece I leave until the last. I start with ‘ sell the house, never’ as a default position.”
Most people want to hold onto their home into retirement. The latest data from 2012 Census from Statistics Canada show only about 2.6% of the population 65 and over was living in residences for senior citizens — about 72.3% of them women.
Living and working longer means more people staying in their homes longer and, in some cases, even upsizing their homes by taking on more debt, says one real estate executive.
The evidence from StatsCan shows that in 2011, 66.5% of men aged 65 to 69 lived in a singlefamily detached house compared with 60.4% of women. Once you get to 85, just 44.3% of men live in a single- family detached house and 30.9% of women.
It’s clear the older we get the more likely we are to abandon the family home, with the difficult decision being when to do it. A key trigger point is when kids move out of the house and you just don’t need the space.
“Many people move from more expensive areas to [ cheaper ones] to save money too,” says Ms. Andreana, who suggests if you are still making mortgage payments into retirement you really need to think about moving because your income is gone.
The problem is adult children are moving back home like never before, forcing many Baby Boomers to keep that extra- large house just in case their kids need a soft landing. StatsCan said about 42% of young adults 20 to 29 lived with their folks in 2011, a huge jump from 32.1% in 1991 and 26.9% in 1981.
That could be a reason to actually downsize — so your kids can’t move in. “I actually did that with my kids,” Ms. Andreana says with a laugh. “I sold my threebedroom house and bought a townhouse and said, ‘ Guess what? Your bedroom is gone. There is nowhere for you to go.’ ”
Doug Norris, chief demographer at Environics Analytics, said Baby Boomers probably worry about their kids but also about the economic climate, which could keep them in the house longer.
Your bedroom is gone. There is nowhere for you to go
“It’s uncertain times,” Mr. Norris says. “But there comes a time where you do make that choice, and it’s often driven by lifestyle.”
Mr. Norris says a new trend developing is downsizing to condominiums but doing it by moving to the suburbs so Baby Boomers can be close to grandchildren. Condo growth in Toronto’s suburbs has actually been faster than downtown, even if the overall number of units pales in comparison, but in many Canadian cities highrise development outside the urban core is negligible.
“You see a lot of caregiving of grandkids being done by grandparents today and they want to be close to them,” he says.
In some cases those Boomers are actually taking on more debt so they can get into a larger home later in life.
“It is surprising to most people that instead of downsizing they are setting new standards for retirement living,” said Gurinder Sandhu, managing director of Re/ Max OntarioAtlantic Canada. “There is a significant number of them upgrading and actually assuming greater mortgages. It’s so unlike previous generations.”
It could have something to do with the housing boom. Surveys continually point to people believing their homes are a key part of their retirement package. If you believe that, leveraging a good investment can make sense.
T he bottom line is Baby Boomers seem destined to stay in their homes as long as they can, says Fred Vettese, chief actuary at Morneau Shepell. “The vast majority ( nine out of 10) of middle- to upper- income Canadians own their home at the point of retirement, and almost all of them stay in their homes beyond retirement,” he says. “The slight percentage drop in ownership among those who are 70- plus probably reflects the portion of them who are 80- plus who move to retirement homes or move in with their children.”