Boomers are quietly changing the condo market
Much has been written about first-time buyers flooding the condo market, but boomers, too, are having a considerable impact, as reflected in prices.
In fact, given the home equity they’ve built over decades, boomers have become a force in Toronto’s luxury condo market.
“The increased demand, coupled with low inventory levels, has certainly put upward pressure on prices,” said Forest Hill Real Estate broker Matt Smith. “Condo prices have far outperformed detached homes in 2018, and this is really shaping up to be the ‘Year of the Condo.’ Some forward-looking developers are taking note of this shift and providing more on-site amenities to attract baby boomers, such as providing resident-exclusive IT assistance for any computer or mobile devices, chauffeur services and larger common areas to accommodate family gatherings. Convenience is the key piece here, and it is beginning to slowly influence the developers’ product offering.”
Smith—who specializes in the luxury market—says that boomers began noticeably impacting Toronto’s condominium market last year as their nests emptied and the search for low-maintenance lifestyles began. Moreover, their sheer numbers make their impactful entrance into the condo market none too surprising.
“The trend really started last year but has certainly continued well into 2018,” he said. “Baby boomers are selling their family homes and downsizing into condominiums across the city in search of a more convenient, low-maintenance and turnkey approach to housing in a central location with extensive amenities. It’s a unique shift, somewhat of a generation cycle. Baby boomers represent one of our larger demographic segments and their entrance into the condominium market has been one of the largest forces driving condo prices in Toronto.”
Other factors could explain their entrance into the condo market, as well. Erica Mary Smith noted that one of her clients, a judge in her 60s, just received a large inheritance from a deceased mother and can finally afford her dream home. However, the Stomp Realty co-founder and broker of record suspects that boomers’ impact on condo prices, while real, may be overstated.
“I don’t see the boomers pushing the pricing,” she said. “I think it’s just how Toronto is growing and expanding, and there being tons of immigration to this city, that’s driving pricing up. Boomers, at their age, can afford to get in but I don’t see them driving up the price at all. They’re a small element and I think there are bigger factors. A lot of investors are happy to pay $100,000 or $200,000 over market value because it’s still cheap in their books. Boomers can just afford to get into what they want.
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