Bob Rennie’s annual address to Greater Vancouver’s development community usually includes one headline-grabbing statistic. There’s also a good chance it will contain at least one sharply aimed barb in the direction of someone whose viewpoint he doesn’t particularly admire – no matter their exalted status.
This year’s big revelation was the amount of real estate wealth boomers and super seniors (those 75 and older) in the region are sitting on. Of course, we’ve always imagined this would be some fantastical number given the value of property in the area but it is Mr. Rennie (with the help of some number geeks at the Urban Futures institute) who has now given us an idea of what we’re looking at: $163.4-billion.
This is mortgage-free property, most of it tied up in single-family dwellings that more and more aging boomers want out of. According to Mr. Rennie, fully one-third of Greater Vancouver’s housing stock has more bedrooms than people. There are now nearly 400,000 empty bedrooms in the region; a number that has increased by 26 per cent over the past 10 years.
And according to Mr. Rennie, this is a central reason why there is a lot of money going to be freed up over the next 10 to 15 years, as empty nesters look to downsize and use some of their money to help out children and grandchildren with their own mortgage down payments.
What’s unique about this phenomenon is that in previous generations that transfer of wealth usually didn’t happen until parents died. Not any more.
I certainly fall into the demographic of which Mr. Rennie speaks: a late 50s boomer who owns a single family home on a largish piece of property, replete with a small forest of towering cedars. But those same trees and the yard work they create seem to get more burdensome by the year. Climbing on to the roof to clean off moss increasingly feels like a dicey proposition. That said, having a drink with friends in the backyard on a beautiful summer day is hard to beat. I, too, imagine little grandchildren running around on a lawn that, to them, would seem expansive.
And then there is the decades worth of stuff one accumulates; some of which might be easy to part with, but much of it not. That is when the idea of downsizing to a 1,000-square-foot condo in downtown Vancouver seems like more pain than it’s worth. When you start looking at condominiums or townhouses in the 1,300 sq. ft. or higher range, you’re suddenly facing list prices more than the value of your own suburban home. And who wants to take out another mortgage in their 60s?
What Mr. Rennie told the Urban Development Institute luncheon last week seems to confirm my experience; he said what downsizing boomers are looking for now is affordable three-bedroom condos and townhouses. He’s talking about units that are at least 1,250 sq. ft. or more and that don’t cost so much that they prevent boomers from seeing a profit from the sale of their home they can pass along to their children.
Meantime, Mr. Rennie used his address to confirm what we’ve all suspected for years: Greater Vancouver is increasingly a multicultural mosaic. There is an average of 24 different ethnic groups represented in many of the region’s neighbourhoods. We’re approaching the point where nearly 50 per cent of the city of Vancouver’s population is of Asian origin. This will not change, he said, nor should we be putting in measures to try and prevent it from happening.
And it was at this point in his talk that the high-profile real estate marketer took aim at the high-profile environmentalist David Suzuki for his recent comments about the volume of new immigrants arriving to Canada.
In an interview, Mr. Suzuki called Canada’s immigration policy “disgusting” for encouraging brain drain in poorer countries in a bid to stimulate economic growth here. He also questioned why we were opening up our borders to newcomers when the country was pretty much “full” as it was.
“We all have friends whose lives and our lives are better off because they moved here and their families are going to join them,” said Mr. Rennie, who called Mr. Suzuki’s remarks regrettable. And in chastising the Vancouver-based environmentalist for his observations, Mr. Rennie invoked memories of the federal Exclusion Act of 1923, a law that helped ensure only 50 Chinese immigrants were allowed in Canada over the next almost quarter century.
“We have to start understanding that we no longer live in Vancouver, we live on the planet,” said Mr. Rennie. “Globalization isn’t just a word. It’s the new reality.”