Home-owning Canadian baby boomers are among the most fortunate people in the world.
This isn't to say, of course, that the economic sailing has been easy all the way since the end of the Second World War. There was the oil crisis of the early 1970s, the dot-com stock market correction of the late 1990s, and, most recently, the short, sharp recession of 2008 and the aftershocks that continue to shake the ground under our feet down to the present day.
But generally speaking, the last several decades have been good to real-estate owners, with house values rising, in some places exponentially, while inflation in most other areas of the economy (except for energy) remained moderate. It's hardly surprising that Canadian boomers decided to enjoy their equity during the high-rolling 2000s, when they were also earning top dollar in their careers. They went heavily into debt to invest in the stock market and other ventures, and to finance luxurious lifestyles - so much so, in fact, that many are facing their retirement years with large mortgages. Though the great majority of boomers thinks that being debt-free upon retirement is the best way to go, less than half of those now retiring have paid off their home loans. And a quarter of the number hitting retirement age with a mortgage still owe 75 per cent or more (60 per cent in Ontario) on the balance.
These statistical findings appear in a study called the TD Canada Trust Boomer Buyers Report, released by the TD Bank Financial Group two weeks ago in Toronto. Based on interviews with 1,000 Canadian boomers in every region of the country, the report attempts to create a profile of housing consumers who are embarking on their last laps around the track.
While Maritimers are much more likely than other Canadians to stay put in their family homes throughout retirement, the study discovered, about half of the boomers surveyed across the country want go on living where they've been for years. The reasons range from avoiding the hassle of packing up and moving (61 per cent) to enjoying having the extra room for visiting family and friends (28 per cent).
The other half of respondents would like to make at least one more move in their lives, with most of them (almost 90 per cent in Ontario) opting for smaller digs.
For those observers (including this writer) who would like to see more retirees in downtown towers - it would help make the core more geriatric-friendly and civil than it is today - there's a bit of bad news here. Most boomers who plan to move (61 per cent) are looking for detached houses, with condominium apartments coming in a distant second at just 24 per cent. People clearly want backyards and gardens (61 per cent), and they don't want to pay condo fees (57 per cent).
The good news, however, is that more than half the boomers surveyed were attracted by certain features of condo living and would at least think about taking it up. Freedom from maintenance worries (84 per cent), for instance, enhanced security (54 per cent), and such amenities as gyms and pools (47 per cent) are among the lures of condo life. But it looks as if another generation or two will have to go by before the high-rise apartment becomes a viable retirement alternative to the stand-alone house.
Unless, that is, the apartment in question is a walk-out to a lovely northern lake or sunny beach. The survey found that 10 per cent of Ontario boomers own vacation properties, and another 11 per cent are thinking about buying one for retirement. And a whopping one-third of the Ontarians nearing or at retirement age are considering properties in the U.S.
Many consumers see "the depressed U.S. housing market as an opportunity," said Farheneh Haque, a mortgage specialist at TD Canada Trust. But there are dangers in going this route. "It is essential to talk with a qualified mortgage advisor if you are considering a property purchase in a different country," Ms. Haque said. "While there can certainly be opportunities, it is important to consider lending rules and taxes. An expert can help walk you through the paperwork and decide whether property in another country really is an affordable option."
The TD Canada Trust Boomer Buyers Report is an interesting snapshot of an important slice of the demographic pie, and it presents valuable insights into a generation that, on the whole, has had a good and productive run.Report Typo/Error
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