As more and more seniors are considering retirement homes in Canada, the market is struggling to keep up with record-high demand.
While Statistics Canada’s 2016 census showed that the “country recorded its greatest increase in the proportion of seniors,” last year, experts told the CBC that “Canada is failing to prepare for the housing and home care needs of an aging population,” despite having decades to prepare for the demographic shift.
The National Post’s Naomi Powell recently suggested that “the problem comes down to a failure of supply to keep up with demand.” Both the CBC and the rating agency DBRS Ltd. have predicted that by 2026, more than 2.4 million Canadians aged 65 and older will need continuing care.
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What’s more, the number of Canadians who need “‘supportive care’ offered by retirement homes, including monitoring of medication, regular housekeeping, meal preparation and other services… is expected to reach ‘a staggering’ 3.3 million by 2046,” Powell reports.
With more demand than availability, seniors are experiencing long wait lists or are simply unable to find the care they need at a price they can afford. Data shows that in 2012-2013, “34,312 individuals were on a waitlist for their preferred choice of a long-term care residence,” Gollom reports. Wait times are not improving because the country can’t keep up with the demand for senior care.
Meanwhile, housing prices across the country have skyrocketed, making home ownership unattainable for many Millennials and senior housing unaffordable for many seniors.
“The supply of seniors housing, for 2017 in Ontario, has not kept pace with current demand levels across all types of care,” says Primecorp Commercial Realty. According to the CMHC, “total supply of seniors’ housing grew by 2.4% to 57,663 spaces in 2017, slower than the 2.9% growth rate for the population aged 75 years and older.”
Primecorp, which is based in Ottawa, suggests that “this shortfall, fueled by pent-up demand and a lack of new supply in the construction pipeline, has led to the lowest vacancy rates for seniors housing in Ontario since 2001.”
The result is that costs for senior housing have seen steady increases, especially in high-density urban centres. “In the GTA, the majority of all rental spaces for seniors now cost more than $4,000 (54.1%). The average monthly rent for a standard seniors’ living space in the GTA has risen to $4,159 in 2017, up from $3,825 in 2014,” the Toronto Star reports.
The Financial Post notes similar increases across the country in 2017, with the average monthly price for a standard sized senior housing unit costing:
While prices continue to increase and many seniors wait for a spot in their preferred retirement community, a report by Royal LePage has found that baby boomers are beginning to move out of their large, single family homes, opting instead for low-maintenance condo living. The result is that “luxury condo prices are outpacing appreciation in luxury detached homes in most markets across the country.”
Ben Myers, president of the real estate consultancy firm Bullpen Consulting, recently told Beach Metro’s Josh Sherman that “the expansion of rent control, which as per the Ontario government’s Fair Housing Plan announced in April 2017 is now applied to rental units constructed after 1991, [which] could make retirement homes an appealing option for developers who might otherwise have built apartments.”
So, while Baby Boomers are causing an increased demand in condo prices, developers may be less likely to opt to build new condos and apartments, considering the benefits of building retirement communities instead. “With rental increases that landlords can charge now limited on newer buildings as well, retirement homes — with their meal plans, medical services, and other revenue generators — could provide a better return,” Myers suggested.
Meanwhile, the trade war which rages on between Canada and the United States is expected to set new senior housing projects back even further. The Financial Post’s Natalie Wong reports that the construction industry is bracing for higher construction costs, predicting that some new builds will be stalled or even canceled due to skyrocketing costs.
“The price of steel used for construction projects across the country has already soared by about 38% in 2018 due to a booming property market and a lack of supply, according to the Canadian Coalition for Construction Steel,” Wong reports. She suggests that “wider steel quotas or tariffs would hit British Columbia [hardest] as the province has historically relied on imports for more than 60% of its annual consumption.”
While the need to build new senior housing is at a critical point, the fact is that increasing construction costs may actually slow construction of new retirement communities and condos across the country, which will only further exasperate an industry in which the demand for affordable senior living is huge, and the availability is dwindling.
The take away for Canadians is don’t wait to investigate senior care.
Look into communities in your area now and get on the waiting list for communities that make your short list. With some foresight and luck, you may be able to skip the queue when you find you need additional care and support.
Are you concerned about securing a spot in a retirement home? Have you or a loved one considered looking into retirement homes in Canada well in advance of when you’ll need one? We’d like to hear your stories in the comments below.