More people than ever before are working past 65. Gen Xers are complaining of being sandwiched between them and the millennials, which has stalled their career advancement. Boomers generally have more disposable income than their predecessors, along with longer average lifespans.
These are common headlines these days and the question, as always, is what impact the silver-haired cohort will continue to have on real estate.
The impact of the boomer generation will continue to be felt for the next 40 years, given the youngest has just reached the age of 55.
The last half of this group can still be considered young, for those of us old and wise enough to appreciate that youth is wasted on the truly young. And in fact, that’s what makes this generation so different – for the most part, it has forgotten that aging happens.
“Age” a state of mind for boomers
There are lots of people working over the age of 65 – just look around Home Depot as an example where lots of young-at-heart-but-over-65ers remain in the workplace. The latest available Census data on the subject found that, “In 2015, one in five Canadians aged 65 and older, or nearly 1.1 million seniors, reported working during the year. This is the highest proportion recorded since the 1981 Census.”
This may be a financial necessity for some, but for many, they just want to keep productive and perhaps try something different, even if it carries a much smaller pay cheque than their “career” did.
Most of the boomers, and I’m in the first half of the group, are living longer and the concept of aging is hard to grasp for us.
In my father’s case, he felt old in his 60s, as his own father and none of his uncles made it to 70. I remember him saying to me to take care of Mum after he was gone.
Well, he turned out to be the Energizer Bunny – blew past 70 while still working full-time, breezed past 80 while still at work, and did part-time work until just past 90. He was quite surprised to discover the fate of the generation which preceded him, was not his fate.
What is going to happen to us in Canada?
In the mid ’80s, the population of children 15 and under in Canada was twice that of seniors. There are now about 106 people 65 and older for every 100 kids.
Housing is expensive and there doesn’t seem to be any softening in demand. Where does all this lead when you also consider people are living longer and boomers are still listening to rock ’n’ roll?
Older seniors who need help can get in-home assistance, as in the case of my mother-in-law who at 96 is still at home and only recently gave up her driver’s licence. The alternative of a retirement home is expensive.
One way to look at the future is that the appreciation on house value might offset some or perhaps even cover entirely the cost of in-home assisted care. This is becoming increasingly likely as new technologies make remote care more viable and cost-effective.
Multi-generational living has never disappeared and with the high cost of housing, there may be more mixed families, with older seniors still being part of the larger family unit.
Seniors’ desire for independence
So, home ownership is going to continue to see a mix of outcomes. Home repair, renovation and additions may be a growing industry to accommodate the potential change in family make up and senior support services.
The desire among seniors to keep their independence is ferocious, and as I noted above, rising levels of home equity may provide a significant financial support.
My thoughts first turned to this subject after a recent Pew Research article detailed how the U.S. is also seeing a record number of seniors remaining in the labour force. While it is fair to assume they are doing so for the same reasons as their Canadian counterparts, there is the added dynamic of people afraid of living too long without the benefit of a real national health insurance program.
Media coverage of this research suggested that baby boomers in both Canada and the U.S. may eventually vacate their homes to move into assisted living, in such numbers that it will add enough inventory to the housing market to moderate prices in certain inflationary markets.
But, I think to suggest that this could be a substantial trend is a big overstatement. The larger homes which boomers have occupied for some decades may become a real asset in what may be a surprising future for family demographics.
As a side note, I referenced Gen Xers complaining about getting pinched between the boomers and the ambitious millennials who are nipping on their heels. That came from this article in the Harvard Business Review.
To discuss this or any valuation topic in the context of your property, please contact me at [email protected]. I am always interested in your feedback and suggestions for future articles.