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A trend to look out for in Montreal’s real estate market in the coming years is the rapid rise in demand within the seniors’ housing sector, providing an interesting opportunity for developers and investors.
What exactly is senior housing?
Senior housing projects are conceived as residence units with customized services, intended for the elderly with a slight loss of autonomy. Unlike conventional retirement homes they are purchased by their elderly inhabitants (or by their families), providing an investment alternative to the generally expensive retirement home rentals. These homes can later be sold, rented to other elderly, or passed on within the family. The units are located within fully serviced buildings with medical/nursing quarters, cafeteria services, social and recreational events, and a range of entertainment activities. And most importantly, they provide a sense of community to a population that are typically prone to isolation and loneliness, while allowing them to benefit from a higher quality of life and comfort.
Statistics from Centris and CMHC show that while other condo starts have begun to decline in 2014, the increase in senior housing starts in the Montréal CMA should be relatively significant in 2015 and 2016. In fact, it is expected that over the longer forecast horizon, the numbers of new senior and retirement homes are expected to spike up at a fast pace. Looking at the demographics, the 75+ baby boomer population will increase from 285,000 to 570,000, almost doubling. This bracket consists of the target client group for these projects. A study conducted by the CMHC revealed that about 17 per cent of people aged 75 or older in the Montréal metropolitan area already live in seniors’ housing projects in the CMA7. If this 17% proportion remains constant for the next 15 years, the housing projects will have to increase substantially to meet potential demand. Developers believe that potential demand will peak at around 2030, and are building several retirement homes around Montreal to be positioned for this eventual boom. The number of retirement homes starts in the short term (between 2015-2020) are forecast at more than 1,500 to 2,000 units annually However, many member of the coming generation of retirees are opting for housing options in fully serviced senior housing projects rather than in conventional retirement homes, opening up an underserved niche in the market.