Baby Boomers will finance kid’s Vancouver Real Estate purchases
The Baby Boomer generation will help to finance their kid’s home purchases by selling their own properties.
Bob Rennie is predicting that the Vancouver Real Estate Market over the next 15 years will diverge into two markets financed by ageing baby boomers and their paid off homes.
The first market will be made up of the downsizing baby boomers, who have paid off their homes and are looking to move to smaller properties. Their current homes have no, or very little mortgage. The other will be their kids and grandkids, in both instances the purchases will be financed by those baby boomers!
Acknowledging the short term softening in the Vancouver Market, Rennie told an audience of Urban Development Institue professionals that 590,000 newcomers to the greater Vancouver area will purchase the homes of the baby boomers over the next 15 years.
Just 4.9% of Metro Vancouver residents earn more than $100,000, while 65% earn less than $55,000 per annum.
“The feds, Flaherty and the banks have a really hard time understanding the Vancouver real estate market,” Rennie said. “They’re asking how does a $50,000-a-year income find a $75,000 down payment.”
Rennie noted that they are getting the down payment from their parents and grandparents.
He also noted that the demographics of BC mean that baby boomers will not be forced to sell their homes, as they have mostly paid them off in full. Even if we see a slight price decline then boomes will still sell their homes, if they can stay in their community, but move to a property that fulfills their needs.