Hello everyone! Toronto realtor Danielle Demerino here. What a crazy time it has been for Toronto real estate over the last 12 months. As a realtor in Toronto, I have seen some crazy deals. Properties selling for hundreds of thousands over asking. 40 offers one a single listing. Bidding wars galore! It has become the norm to put in your offer without any conditions and hope for the best.
I have recently been working with a wonderful older couple from London, Ontario and they just purchased a beautiful 2.2 million dollar condo near the Old Mill.
This got me thinking about the question “are seniors even downsizing”? And if they aren’t “what will happen to the Toronto housing market”? I started doing some research on this topic and found some interesting information.
This past summer, Ryerson’s National Institue on Ageing conducted a survey and found that 91% of respondents would “try to live safely and independently in their own home as long as possible.” This survey was done in the summer of 2020, so we have to consider that COVID-19 may have had an effect on response. However, there was a pre-pandemic 2020 survey conducted by Mustel Group and Sotheby’s International Realty that reported similar findings with 86% of boomer homeowners would like to live in their current home as long as possible.
Yes, survey results about intentions are always interesting, but statistics are always more intuitive. Statistics Canada found that “seniors are less likely to move than the general population” in the 2016 Census. Also “only 5.5% of seniors 65 to 74 years old, and 4.7% of those 75 years and older had moved compared to 13% of the general population in the previous year.”
These results also concluded that most of those who move are either separated, divorced, or widowed. This suggests life-changing events such as these could be part of the reason for downsizing and not people proactively downsizing as a part of their retirement plan. This then poses the question if seniors aren’t downsizing in herds, what will that mean for real estate as a whole?
When you take a step back and look at the overall cost when moving in Toronto and the surrounding areas, the transaction fees can really add up. The average home in Toronto costs about one million dollars, add on land transfer taxes (sometimes over 3 percent) and of course realtor fees (which are higher in Ontario), we are sitting around 10 percent when you consider lawyer fees, moving and any other surprise costs that may come about. These fees may have something to do with the hesitation when it comes to selling their home.
Often when talking to my clients, friends, or family about downsizing, the topic of condos comes up. But recently, Royal LePage released a report that found in the Greater Toronto Area, the median price per square foot for a condo was approximately 53% higher when compared to houses. This is basically telling us that seniors may not be profiting much after we consider all of the transaction fees that come along with buying and selling.
When I started to really think about all of this research I realized that my parents still live in my childhood home and so do my three closest friends’ parents. When I asked them about it they just said it’s easier and cheaper to stay put, which is really exactly what I have been reading about.
If you are a senior thinking about downsizing or if you have a parent thinking about downsizing, please give us a call at 416-728-5401. There are many options out there and each option should be tailored to your situation. Whether it makes sense to move to a condo, a bungalow, a retirement community, or stay put, we can help.
