Source: Sotheby's International Realty Canada
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Baby Boomers’ Investments in Residential Real Estate Outperforming Other Financial Investments

61% of urban baby boomers indicate real estate investments outperform financial assets according to a report from Mustel Group and Sotheby’s International Realty Canada

Toronto, Ontario, Feb. 13, 2018 (GLOBE NEWSWIRE) --


A joint report from Mustel Group and Sotheby’s International Realty Canada highlights high levels of confidence in Canadian real estate performance and financial returns amongst Canada’s urban baby boomers. 61% of baby boomers in the country’s four largest metropolitan areas indicated that their real estate investments have outperformed other financial assets such as RRSPs, TFSAs, stocks, and bonds. A significant percentage of Canadian boomers are confident that real estate will continue to outperform their financial portfolios in the future.

According to the Canada’s Intergenerational Wealth Transfer & Next Generation Home Buyers, a report on generational trends, baby boomers residing in Vancouver, Calgary, Toronto and Montreal who currently own real estate expect the returns of their property to outperform financial investments within the next five years. Overall, 47% anticipate real estate gains to exceed their financial investments, while 28% expect on
par performance. Furthermore, this group believes buying real estate in their city is a positive financial move, with 57% deeming it a “very good” or “good” investment.

Urban baby boomers’ confidence in investments vary region by region, with those residing in Vancouver and Toronto the most likely to indicate that their property investments have outperformed financial investments, at 72% and 68% respectively. In Montreal, 47% of baby boomers believe that real estate has surpassed the return on their financial investments. In Calgary, despite volatility in the real estate market since Alberta’s economy commenced its downturn in 2014, 46% of the city’s baby boomers indicated that they have seen stronger returns on real estate than on their financial portfolios.

According to data from the Canadian Real Estate Association1, the average price for a single-family home in Greater Vancouver in December of 2017 was $1,604,700, marking a 76% increase from the average price five years earlier. During the same time period in Calgary, the average price for a single-family home reached $478,300, amounting to a 13% increase. In the Greater Toronto Area, the average single family home price was $855,900 in December 2017, a 64% increase from five years prior, while the average home price in Greater Montreal totaled $347,700, marking a 15% increase.

According to the report, 74% of those surveyed would recommend investing in real estate to the next generation of Canadian home buyers. Further, one-third of baby boomers either plan to or have already given a living inheritance for helping relatives purchase residential real estate. Of this segment of the population, 12% have already completed the gifting of funds.

According to Jami Koehl, Principal of Mustel Group, “Survey results reveal that a majority of boomers across Canada’s four largest metropolitan areas have experienced strong real estate gains relative to their financial investments, and remain confident that real estate will outperform or match financial portfolio returns in the future.”

With the deadline for RRSP contribution looming on March 1st, 2018, many Canadians are left with the decision of where to direct financial contributions. With real estate returns strong across Canada’s major urban centres, the expectation from Sotheby’s International Realty Canada is that many in the next generation of homebuyers will follow their parents’ example, leverage parental financial support and opt for a residential real estate purchase.

“For many generations of Canadians, home ownership has been fundamental to long-term financial planning, security and wealth creation, even as local real estate markets have fluctuated in the short-term,” says President and CEO of Sotheby’s International Realty Canada, Brad Henderson. “It’s no surprise that baby boomers remain bullish about real estate in spite of recent headwinds that have introduced new uncertainty into the Canadian real estate market, and in light of record performances by U.S. stock indexes in the past year. We expect this generation to influence the next and to actively help their children invest in real estate at levels that will likely surpass their involvement in other financial investments.”  

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The report is based on findings from a survey of 2,026 urban baby boomers (ages 52-71) in Canada’s four largest census metropolitan areas (CMAs): Vancouver, Calgary, Toronto and Montreal. Data was gathered from August 29 to September 25, 2017.
For more information on Mustel Group and Sotheby’s International Realty Canada’s Generational Trends Report: Canada’s Intergenerational Wealth Transfer & Next Generation Home Buyers, please contact:
Talk Shop Media
Maxine Jakubke
604.738.2220
Maxine@talkshopmedia.com

About Mustel Group
Mustel Group has been a leading market research and public opinion research firm in Canada for more than 30 years, trusted by a wide range of the country’s most esteemed public and private sector institutions to design and conduct qualitative research, quantitative research and omnibus surveys in order to understand the thoughts and motivations underlying peoples' emotions, opinions and behaviours.  For further information, visit  www.mustelgroup.com

About Sotheby's International Realty Canada
Combining the world's most prestigious real estate brand with local market knowledge and specialized marketing expertise, Sotheby's International Realty Canada is the leading real estate sales and marketing company for the country's most exceptional properties. With offices in over 30 residential and resort markets nationwide, our professional associates provide the highest caliber of real estate service, unrivalled local and international marketing solutions and a global affiliate sales network of over 900 offices in close to 70 countries and territories to manage the real estate portfolios of discerning clients from around the world. For further information, visit www.sothebysrealty.ca.
Disclaimer

The information contained in this report is based on data from a survey of 2,026 urban baby boomers (ages 52-71) in Canada’s four largest census metropolitan areas, Vancouver, Calgary, Toronto and Montreal, conducted from August 29 to September 25, 2017, as well as insights from Sotheby’s International Realty Canada. While the panel sample is demographically representative, margins of error only apply to random probability samples. The margin of error on a random probability sample of 2,026 respondents is ±2.2 percentage points, 19 times out of 20, and ranges from ± 3.5 to 4.9 points for 400-800 respondents. Mustel Group and Sotheby’s International Realty Canada caution that such research and data can be useful in establishing trends over time, but do not imply causation with sales activity or real estate market performance. This report is published for general information only and not to be relied upon in any way. Although high standards have been used in the preparation of the information and analysis presented in this report, no responsibility or liability whatsoever can be accepted by Mustel Group, Sotheby’s International Realty Canada or Sotheby’s International Realty Affiliates for any loss or damage resultant from any use of, reliance on or reference to the contents of this document.

1 https://www.crea.ca/housing-market-stats/mls-home-price-index/hpi-tool/


Talk Shop Media
Maxine Jakubke
604.738.2220
Maxine@talkshopmedia.com