While headlines continue to forecast a dreary economic future for baby boomers heading into retirement, local realtors believe that, for now, real estate may be the silver lining.
"The trend I am currently seeing, are boomers enjoying the tremendous equity increases in their homes combined with the lowest interest rates in history," says agent Sue Johnson for Dexter Realty.
Agent Walter Wells, of Sutton West Coast Realty, www.walterwells.ca, agrees. "The average cost of a single family home in Vancouver was $100,000 in 1980. In 2010, it is $1,000,000," he says.
"Many boomers bought their homes in a time when housing costs were one-tenth of what they are now. With their kids leaving home, they are in a position to cash in, downsize, and make use of their liquidated equity," Wells explains.
Boomers are using this equity to, "finance renovations, purchase retirement vacation homes, and help their children enter a real estate market they could otherwise no afford" says Ms Johnson.
Some anticipate that an increase of downsizing baby boomers will reduce property prices. According to BC Statistics, the province's population of baby boomers has grown by 55 percent in the last ten years but the Vancouver and Lower Mainland markets remain strong.
It is possible that Olympic hype may be aiding the current market. Last month, the Real Estate Board of Greater Vancouver reported 2,473 residential property sales, an increase of 67.1 percent compared to January 2010.
An influx of purchasers from Mainland China is also affecting the Vancouver market.
This continued demand gives downsizing boomers the option of selling their Vancouver home and relocating outside the city, "freeing up cash to use as a nest egg, which is one of the most popular reasons for downsizing," says Mr Wells.
"On the west side of Vancouver, the median price of a single family home was $1.688 million at the start of 2010. The median price of an apartment in Tsawwassen was $335,000. Even if a boomer were to purchase an apartment at twice the median price, they would still have an over $1 million, tax-free nest egg," he says.
However, many boomers have grown accustomed to a neighbourhood, community or lifestyle.
"Boomers still want a den, master bedroom, elegant ensuite and an extra bedroom for guests or visiting children. Plus, they want a vibrant location and exciting lifestyle,: says Ms Johnson.
This desire for luxury and location means that, "it is easy to sell an older home on a big lot for $2 million and turn around and spend all that money on a 2,000 square foot luxury condominium in a neighbourhood like Kerrisdale," says Mr Wells.
So, boomers are coming up with creative solutions, says Ms Johnson.
"One very clever couple is going to build a laneway home on their Point Grey property to use as their retirement home. They will rent out their primary home and the income from that will pay for the taxes and upkeep, allowing them to keep their investment and continue to enjoy the same neighbourhood that they have grown to love," she says.
