A recent report from Royal LePage highlights how shifting economic conditions, evolving attitudes toward home ownership, and changing demographics are all influencing this trend.
According to the report, nearly 30 per cent of Canadians planning to retire in 2024 or 2026 expect to do so with outstanding mortgage obligations. This marks a stark contrast from historical data. In 2016, only 14 per cent of senior families carried mortgage debt. According to Statistics Canada, this figure was just 8 per cent in 1999. The increase signals a broader transformation in both housing affordability and retirement expectations.
Today’s retirees face an environment vastly different from previous generations. The average age of first-time homebuyers has steadily increased, with 43 per cent of buyers in 2023 aged 35 or older. This is up from 33 per cent in 2021. This delay in home ownership inevitably pushes mortgage payoff timelines further into the retirement years.
Moreover, the average retirement age in Canada has also climbed, from 61.6 years in 2000 to 65.3 years in 2024. Canadians not only work longer but also live longer. The report notes that people today spend roughly 50 per cent more years living post-retirement than their grandparents. With this shift has come a redefinition of retirement itself, as more seniors continue working or staying active longer.
Baby Boomers are experiencing the same affordability challenges as younger generations. Despite owning a significant portion of Canada’s single-family homes, many Boomers have yet to downsize or sell. Royal LePage’s research suggests their delayed transition out of large properties is a departure from earlier patterns. The high cost of downsizing plays a role in this delay.
Regional variation also affects retirement housing decisions. Downsizing might be more feasible in markets like Halifax or Calgary where housing costs are moderate. In contrast, retirees in Toronto or Montreal find that moving into a larger condominium doesn’t necessarily save money once condominium fees and long-term costs are factored in.
Royal LePage’s survey of real estate professionals shows that Canadians approaching retirement are split in their intentions: while some plan to downsize, others intend to remain in their current homes. With homeownership strategies, it’s increasingly clear that carrying a mortgage into retirement is no longer seen as a failure.
As economic conditions continue to transform, Canadians appear to be redefining retirement and financial security, with mortgage debt becoming a more accepted part of the retirement equation.
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