Apr 23 | Posted by Barry Cohen

The term “Baby Boomer” refers to anyone born between 1946 and 1965 a demographic that represents 30 percent of the Canadian population or 9.6 million people.  Now in their 50’s and 60’s these Boomers have benefitted from the steep increases in housing prices over the decades especially in cities like Toronto and Vancouver.  

Boomers now wield a strong influence in the Canadian luxury housing market, and as buyers of these luxury homes they report incomes of about $300,000 to $500,000 annually.  It comes as no surprise then that they can easily afford the price of entry to traditional luxury neighbourhoods even in Toronto and Vancouver where 1 million dollars will only get you a modest detached home.  Home sales over the one million dollar mark are soaring in Canada’s biggest cities.  The following is a chart illustrating the typical price range of luxury property purchased in Canada’s top 4 cities.

Vancouver $2 million to $5 million
Toronto $2 million to $4 million
Montreal $1.5 million to $2 million
Calgary $1 million to $4 million

Boomers have another affect on the luxury market, as an estimated one third of new homeowners get cash from the bank of Mom and Dad.  Wealthy Boomers are helping out their Generation Y (age 35 and under) children by providing the hefty down payments necessary to get them into properties priced at $800,000 and up.  For people 35 and under, a luxury home is likely to be a downtown condo, preferably new with a trendy urban neighbourhood.

The following is a chart of the entry price points of Gen Y luxury homebuyers, which are more than double the cost of a home for the average Canadian first-time homebuyer.

Toronto $800,000 to $2 Million
Calgary $800,000 to $1.5 Million
Vancouver $800,000 - $1 Million
Montreal $400,000 to $1.5 Million

It seems that these wealthy Boomers are of two minds; one group is “right-sizing” to larger homes with room for adult-children still living at home, (or the so called “boomerang” generation that move out on their own only to move back in with their parents – sometimes with a family in tow) or to make room for elderly parents who can no longer live alone.  For the other group, “right-sizing” means buying a 3,000 square foot condo all on one level with a full amenities package and luxury upgrades.

The luxury real estate market is alive and well, in fact “booming” in the GTA and with the strong influence of wealthy boomers and their children there seems to be no end in sight.