Older clients jumping into the condo market

by |
If you’re looking for leads to refer on to your Realtor partners, a new survey suggests your older clients are the soundest bet.
 
A recent BMO Capital reports shows that demand for condos among potential homebuyers is greater among Canadians 50 and older.
 
“Condos remain an affordable alternative to the pricey detached market in some major cities,” Sal Guatieri, a senior economist at BMO Capital Markets, told reporters. “For example, a typical Toronto condo today requires just 22 per cent of a median family's income to service; Vancouver condos – while more expensive – are still affordable at 28 per cent of income.”
 
According to the survey, some 30 per cent of prospective buyers over the age of 50 said they are willing to buy a condo over the next five years, compared to just 17 per cent under 50.
 
A full one-third of prospective buyers in Toronto said they were planning on buying a condo, similar to the Calgary market, where 33 per cent showed the same interest – both slight increases compared to a year ago.
 
However, the Vancouver and Montreal markets are a different story.
 
Vancouver fell from 33 to 28 per cent, whereas Montreal slipped to 24 per cent, down three points from 2012.
 
The BMO survey is good news for a Toronto condo market that has seen construction stall and financing falter. Market results released by Urbanation Inc. – a leading condo analysis firm – show that a total of 2,728 new condominium apartments were sold in the first quarter of 2013, down 55 per cent from Q1 2012; reflecting a 29 per cent downward trend from the 2012 fourth quarter.
 
Compounding the problem is a potential $2 billion to $3 billion financing gap for developers, as lenders pull back from the condo market.
 
  • Paolo Di Petta | dipettamortgage.com on 2013-06-10 10:54:51 AM

    Funny, this is exactly the opposite of another report from Royal LePage in February - http://mrt.gs/164OuG3

    Sounds more like RBC is trying to put a positive PR spin on a market they're heavily exposed to...

    It's not going to happen though - boomers simply won't downsize - their homes are their symbols of their succees - a once aspiration goal achieved. To give it up would be almost as bad as failure.

    Or, in the words of my dad - "Why would I give up this beautiful house, to pay more money move into a 'shoebox' "

    I'm sure the sentiment is the same from most boomers - especially immigrant boomers who came to Canada from much humbler beginnings.

  • Elfie Hayes on 2013-06-10 2:04:12 PM

    As an mature Canadian I get it! No grass to cut, no snow to shovel, turn the key and go on vacation. Sign me up!

    The fact that a person can still have a home in a vibrant city while spending less than the cost and maintenance of a house is a surely driving sales to those of us over 50 and even those of us much older.

    If I could get my husband to kiss the lawn mower goodbye, we'd be selling our big house and joining the ranks of those who want to enjoy themselves by taking in all that Toronto has to offer! He just happens to love working outdoors.

    Selling our house and living in a world class city would not been seen by me as a failure. r I'd see it as freedom from too much housework, high taxes and on-going repairs.

    Take it from a Boomer, we want to get the most out of life since we're going to be here for a long time!

    Having a big life instead of a big house is very much in keeping with what the modern boomer is looking for.


  • Paolo Di Petta | dipettamortgage.com on 2013-06-10 2:21:04 PM

    @ Elfie - that sounds and awful lot like a realtor's salespitch.

    If you think you're going to "save" on taxes and repairs by buying a Toronto condo, I think you need to double check your numbers. Between taxes and maintenance fees, you'll probably won't save a thing...

  • Ron Butler on 2013-06-10 3:07:54 PM

    @ Paolo: seriously Paolo, can't she even state her own opinion. She said "I" and "We" six times. She's just expressing her own thoughts. It's just her opinion about her own situation. I am the biggest attack dog around these sites but this is just silly.

    You cannot accept the idea that some people; even the minority of people, reach a certain age and decide their health does not allow them to maintain a large house, look after a large yard and shovel snow and they choose to move to a condo for those reasons?

    Your statement was "Boomers won't down size" .... like, never..... ever. None of them?
    Really............ none?

  • Paolo Di Petta | dipettamortgage.com on 2013-06-10 6:06:47 PM

    @ Ron - It's not at all about being an "attack dog" - it's about pointing out it's the same rhetoric that's been parroted about for years, but that still hasn't materialized. Boomers haven't been flooding the condo market like people expected they would, and RLP released a study explaining why.

    She's definitely entitled to her opinion and I respect that. That being said - she said it herself: "If I could get my husband to kiss the lawn mower goodbye, ... He just happens to love working outdoors." - That's more common than most people admit. The fact is, she hasn't moved.

    And while opinions are important, so are the numbers - she referenced "the cost and maintenance of a house", and "high taxes and on-going repairs" as reasons to pick a condo over a house - but seeing as she's from Durham, there's a very good chance she's going to see a bump in taxes (even with the decrease in space), there's still condo maintenance to cover (which never gets cheaper), and of course, the dreaded "special assessments" (which again, eat away at that "savings" perceived in downsizing to a condo - a point she was trying to make).

    Long term, condos don't make sense. That's why the government eased up standards for apartments in the 80's - so that REITs could buy up old condos, convert them, and actually turn a profit. Just due the sheer scale, they're much more costly to maintain than single family homes.

    I'm just trying to make sure all the bases are covered here - if it's a lifestyle choice, that's great - enjoy! But trying to pass it off as a good economical choice doesn't make sense.

  • Elfie Hayes on 2013-06-11 7:03:46 AM

    First, I resent the implication that it's a "Realtor" speech I made. I'm not a Realtor and it doesn't matter to me one bit if someone buys a condo or not.

    I don't do mortgages in Toronto as a rule, so I have nothing to gain from stating my opinion on the matter.

    I actually commented because of discussions my husband and I have had recently.

    It's part of our future plan to move to the city and buy a condo, he just isn't ready at this moment. But it is going to happen! And for the reasons I stated.

    Never say never Paolo. You feel Boomers won't downsize, especially immigrants. We are Boomers and I'm an immigrant and we are going to downsize!

    Also, I belong to CARP, you probably don't know that it is the Canadian Association of retired Persons. A group serving those over 45 years of age in Canada and let me tell you there are lots of folks in the association that have downsized and many more who have embraced condo living and they love it.

    Perhaps when you are more mature you will get it too!









    Your thinking seems very rigid and as Ron said, it's my opinion.

Broker news forum is the place for positive industry interaction and welcomes your professional and informed opinion.

Name (required)
Comment (required)
By submitting, I agree to the Terms & Conditions