Housing For Seniors The Next Big Wave (And Opportunity)
The demographic make up of our society is going to change dramatically over the next few decades. Will your portfolio be positioned to benefit?
It is an opportunistic and challenging time to be involved with the business of real estate investing today. Currently 10-15 percent of Canadas total population is aged over 65 and in the coming decades that number is set to double. Along with astonishing advances in technology, there will be significant changes to real estate as we know it. Change will come in different forms; the physical real estate itself being primarily influenced by the Aging In Place concept.
Aging In Place is defined as the ability to live in one’s own home and community safely, independently, and comfortably, regardless of age or ability level. With only 5% of Canadian seniors moving into seniors homes or senior assisted living facilities, the potential for Aging In Place and the demand for products and services related to it will be increasing exponentially.
Will new or renovated homes certified with Aging In Place renovations: sell for a healthy profit, rent for a reasonable premium, and most importantly improve the quality of life of seniors across the country? There is a good chance if these residences are located in fundamentally strong real estate investment areas and offer a good alternative for new retirement homes. Research shows that seniors will usually live within a 10 square mile radius of their kids and grandkids. The most significant factor was close proximity to the eldest daughter. Many people believe that location choice is contingent on the climate; however, Alberta is getting more than its fair share of the seniors, in accordance with its strong job and population growth. The founding partner of Canadas largest seniors housing REIT, shared that Calgary is the #1 underserviced seniors housing market in Canada, with 98% occupancy compared to 87% nationally. However, there are still interesting statistics of seniors looking to retire in other countries, such as The United States, as they have communities that provide assisted living in fullerton, California, as well as other States, but that is a topic for another time.
Taking retirement living to another level as an owner of a real estate investing business, it would be noble to strive to mitigate the Alzheimer’s problem facing our society. One in eight people over 65 suffers from Alzheimer’s, and 1 in 2 at 85 (it is the 6th leading cause of death in US). Wherein, the rest of the top 5 causes of death are declining, the number of Alzheimer’s sufferers is expected to double in next 20 years.
The founding partner of Chartwell Seniors Housing REIT feels that Assisted Living Requirements are the biggest challenges facing the seniors housing industry. He sees it as a huge undertaking to be able to effectively meet the demand that is on the front doorsteps of entrepreneurs and government.
It will be interesting to watch existing Independent Living, Assisted Living and Long Term Care developments evolve as the needs and expectations of the boomer generation replace the current generations of seniors. The market is already calling for two bedroom suites with the guest room/office/studio, independent kitchens and in-suite laundry. You can click here to see the sort of facilities on offer currently. It is also yet to be seen if the entrepreneurs and innovators of tomorrow will be able to drastically increase the percent of seniors checking into Canada’s Independent and Assisted Living developments, the ‘Residences of Tomorrow’.
Whether you are involved with one condo, a high rise, specialize in downsizing services, security, healthcare, realtor or mortgage broker focusing on working with seniors, it may be worth planning how you can do your part to help make a soft landing for this wave of demand and create a win-win situation for your business and for seniors.
Derek Peever is the principal at PeeverConn Group of Companies. With over 60 real estate transactions under his belt since 2006 and 5 active businesses, Derek continues to oversee strong returns being generated for investors and is effectively managing the assets of his valued group of friends and family.