The Globe and Mail‘s Kerry Gold reports on a new wave of condo buyers that is happening at a faster pace than expected. Seniors instead of holding on to their equity rich housing until infirmity forces them into supportive care facilities appear to be cashing out and moving to condominium developments, many with similar square footage on the floor plate as their previous homes.
Called “the transitioning buyer” these older condo purchasers will spend approximately half their equity in their new abode.Developers including “Nic Paolella, director of development for Marcon Developments in Vancouver, says he’s seeing the beginning of a potential flood of downsizers that will become one of the biggest drivers of the condo market. Marcon is a mid-size condo developer with a projected 1,000 units coming on the market this year.”
“This is the tip of the iceberg in terms of amount of capital out there for downsizer buyers,” he says. “We are only at the start of that wave. We are in for a lot more, and it could be a five- or 10-year run of the aggressive downsizer buyer,” he says. “And they have specific interests of where they want to be – often, in a similar neighbourhood to where they were living. Often, they want walkability and access to amenities without a car.”
With the high prices commanded by Vancouver housing, sellers can also now negotiate to continue to live in their homes until their respective condos are ready for occupancy. This can also be for the buyer’s benefit as “if the new buyer plans to tear the house down, as they usually do, it’s more difficult to remove a full-time paying tenant. And if the house is left empty, the owner is looking at paying the new vacancy tax.”
Despite the cooling off of Vancouver housing prices this year, the Teranet-National Bank home price index still shows prices up 17 per cent from 2015. “Long-time realtor Stuart Bonner, who specializes in expensive west-side Vancouver properties for Re/Max, says he’s seeing retirees taking a more “proactive” approach. “Nobody would have predicted what prices have done in the last three or four years. People are saying, ‘My house is worth what?’ They are stunning numbers. A lot of people are saying, ‘I’ve got to take some money off the table.’ These are educated people who realize it won’t go straight up forever.”