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How Have Canadian Baby Boomers’ Real Estate Portfolios Performed Compared to Other Financial Investments?

A joint report from Mustel Group and Sotheby's International Realty Canada indicate high consumer confidence in residential real estate.

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Mustel Group and Sotheby’s International Realty Canada recently collaborated on a consumer confidence survey in which it was reported that 61% of urban baby boomers in Canada had yielded better or on-par returns on their real estate investment compared to other financial investments.

The report, Canada’s Intergenerational Wealth Transfer & Next Generation Home Buyers, outlines current levels of consumer confidence in real estate portfolios in the country’s four largest metropolitan areas: Vancouver, Calgary, Toronto and Montreal.

According to the survey results, baby boomers residing in Canadian metropolises expect their real estate returns to outperform returns on stocks, REITS, RRSPs, bonds, and other financial investments. 47% of the participants believe their real estate gains would exceed gains from other financial investments, while 28% expected an on-par performance. Specifically in Montreal, 47% of baby boomers claim that real estate has outperformed the returns on their financial investments.

Overall, baby boomers reported high consumer confidence in real estate, ranking residential real estate purchases in their cities as “very good” or “good” investments. 74% of those surveyed recommended real estate as a safe investment for the next generation of home buyers in Canada.

Related: Mortguard 2018 Real Estate Outlook for Canada and Montreal

One-third of Canadian baby boomers had already passed on a living inheritance to their relatives – 12%, or planned on doing so in subsequent years – 22%. The median age range of the inheritance recipients was reported at 30-24 years old, while the median amount gifted as a contribution towards a real estate investment was between $25,000 and $50,000. In Montreal, the average amount gifted came in lower at $10,000- $24,999.

Baby boomers in Montreal and Calgary were most likely to recommend a real estate investment to their families, at rates of 83% and 82% respectively. In Toronto and Vancouver, the figures fell slightly shorter at 71% and 66%.

The report also highlights housing market data from the Canadian Real Estate Association1. Notably, as of December 2017,:

  • In Greater Vancouver, the price of a single family home increased by 76% compared to 5 years earlier, to an average of $1,604.700
  • In Calgary, the price of a single family home increased by 13% compared to 5 years earlier, to an average of $478,300
  • In the Greater Toronto Area, the price of a single family home increased by 64% compared to 5 years earlier, to an average of $855,900
  • In the Greater Montreal Area, the price of a single family home increased by 15% compared to 5 years earlier, to an average of $347,700

A note on the methodology: 

The report is based on findings from a survey of 2,026 urban baby boomers.
The average ages of the respondents was 52-71.
Data was gathered from August 29 to September 25, 2017.

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

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