Boomers on a fixed income may find that they can’t find a place to rent.
By Katrina Caruso
More seniors, not enough senior housing, and rising rents—a combination that could mean a housing crisis for Canada’s boomers, according to a recent report from the credit-rating agency DBRS.
The report points to Statistics Canada figures that show more and more people entering their senior years in Canada: according to the 2016 census, the number of seniors now exceeds the number of Canadians aged 14 or younger. The demand for housing in retirement homes and for senior housing is growing, but, the report says, supply has not yet caught up: Canada saw an almost 22% increase in the senior population between 2006 and 2016, while the supply of senior housing grew at a rate less than half that. By 2036, the population of seniors is expected to have doubled.
Even now vacancy rates are low, and high demand plus low supply means that prices for housing are expected to continue to rise—an equation that doesn’t bode well for retirees who rely on a fixed income.
The cost of renting space in a retirement home is already high. While the average rent in Canada is $1,206 a month, housing for seniors costs much more than that. At its lowest, in Quebec, the average rent in a seniors home is $1,678 a month, and in Ontario, which has the highest costs, the average is a massive $3,526 monthly. From 2013 to 2017, rates rose 4.7% for senior residences.
DBRS anticipates that this crisis will most likely affect the rest of the housing market, as retirees will be less inclined to move out of their current homes, reducing the number of homes on the resale market.
The report suggests that the supply and demand will make new housing developments an attractive option for investors—which might help ease the squeeze—although senior housing is heavily regulated and it can therefore take longer to built a residence than to complete a regular housing project.