My last post talked about the “sharing economy” … well, in the future, we all might be sharing much more than we ever anticipated.
Just this week, in our own household, we have started to contemplate our next move after learning that the house we presently live in will soon go on the market. We rent, you see, and according to all the latest statistics … we won’t be the only boomers renting in the near future. Changing demographics, blended families and the economic climate have all contributed to what is being called the next “housing crisis”.
Most boomers come from a generation that favoured the purchase of a house … a home. Home ownership became a symbol of success. The idea was to purchase a big house for your growing family, pay it off over 30 or 40 years and live out your retirement mortgage free. During our parents generation, that was probably very feasible … but is it now?
According to Stats Canada, the first baby boomers reached 65 in 2011, over 5 million Canadians reached retirement age and boomers now represent 46% of the population. It’s around the age of 65 that boomers will feel the urge to sell their house … downsize … move into retirement living or live abroad in warmer climates and rent instead of own. After the 2008 financial crisis, wages have stagnated for workers in their late 40’s and 50’s, who’s careers have plateaued, leaving little room for savings and their homes as their only form of retirement savings. Then come the millennials!
According to Forbes, The Bay Boomer Housing Bust, millennials have a shifting set of attitudes around big-ticket purchases, as well as an evolving attitude toward ownership in general. Homeownership among 25- to 34-year-olds dropped more than any other age group from 2006 through 2011. Millennials are the drivers of the $26 billion Sharing Economy. So to them, what does “owning” even mean anymore? The crisis situation will be the result of too many houses on the market and nobody to buy them!
Many families, like ourselves, are the product of second marriages or partnerships that include teens still living at home. Divorces divided the family homes, larger families were formed and purchasing a big home at 50 is not always the best choice. Paying a large mortgage for the rest of your life, having too much space to maintain once the kids are gone (in a few years hopefully) and not having the liquid assets to travel are enough of a deterrent. Of course, these are personal choices and many boomers feel differently about ownership. There is no doubt it offers a sense of security but hey … I’ve always flown by the seat of my pants … so why stop now! The old hippie commune might just come back into vogue and all us boomers will live happily ever after in this new world of sharing … if nothing else, there will be a lot of big houses to rent.