I had the pleasure of being the keynote speaker at the January dinner of the Guelph and District Homebuilder’s Association. In a wide-ranging talk, I discussed many demographic trends in Guelph and Canada, plus their implications for homebuilders. Here are some of them.
Population Growth: Guelph’s population is projected to continue its relatively strong growth trend for the next two decades. If these projections prove accurate, and if the average household size remains at their current level of 2.5 persons, Guelph would require just under 950 new housing units per year.
Increasingly, population growth is driven by immigration: two-thirds of the growth in Canada was due to immigration in 2012. Historically, new immigrants settled primarily in Toronto, Montreal and Vancouver and, now, smaller cities like Guelph are capturing a large share. Guelph’s immigrant population is very diverse and each group will have different preferences so it may be necessary to build flexibility into design rather than catering to one group: visible minorities in total are just under 14% of Guelph’s population with the most common mother tongues in Guelph after English being Italian (1.9%), French (1.3%) and Vietnamese (1.2%).
Homebuilders need to consider the preferences of different cultural groups in their housing layout – for example, will multi-family or multi-generational households become more common? If so, do layouts require more kitchens? Do they need the flexibility to separate a single family house into two somewhat separate living spaces?
Age: The aging of the Canadian population has been discussed for many years. The front edge of the baby boom has turned 65 and the percentage of the population over 65 is projected to grow substantially. This chart shows the percentage of the population in each 10 year age range over 65 over the next 40 years. The curve for an older group peaks later than for the younger cohorts: it is not until 2050 or so that the group “Age 85 and Over” peaks (at less than 6 percent). I leave it to you to figure out why each group gets a little smaller.The next chart indicates the age at which most of the population moves to “congregate housing”. Most people do not consider moving to retirement or to nursing homes until they are at least 80-85 and the percentage in this type of housing doesn’t rise to 25 percent until age 85. It never gets above 45 percent of the population!
This fact is noteworthy because, for example, many of our 20-year-old students write reports on senior housing. They are insightful for many reasons but often hint that, on the day after turning 65, people move into a nursing home. Two of the biggest changes in Canada over the last half century are the increasing income and wealth of seniors and the improvements in healthy and longevity.
So, while more retirement and nursing homes will be needed in the next few decades, most boomers are not looking for this type of housing for a long time, if ever. The question for homebuilders is: what will appeal to this group? Some boomers will want to stay in the home they raised their children in and would look to renovators to keep their homes workable. Others will look to downsize, often looking for main floor bedrooms and other accessibility features that would allow them to stay in the home longer. Others will want to simplify their lives by moving to a condo which allows them to “lock it and leave it” when they travel south or to the cottage. The point is that this (like most other segments) is not a homogeneous group. They will be looking for a variety of housing options depending on their health, lifestyle and preferences.
Look for further more discussion of trends and implications in future posts.
Sources for charts and statistics:
- Statistics Canada: Community Profile Guelph and Wellington County
- Canadian Housing Observer 2013 (CMHC), see also https://guelphrealestategroup.wordpress.com/2014/01/28/canadian-housing-observer/
- Guelph Wellbeing Initiative http://guelphwellbeing.ca