klaus
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Jul 3, 2012, 10:26 AM
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Active adults changing housing preferences
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Having been in the business of marketing adult lifestyle and retirement communities for nearly 3 decades, one readily notices shifts in housing preferences among mature adults. I recall back in the early 1980s, when acceptable adult lifestyle housing in Canada consisted of a slab-on-grade bungalow of between 900 and 1200 sq. ft. located in the middle of nowhere. Things like basements and garages were deemed unimportant because developers wanted these homes to be as inexpensive as possible. It was a formula that was right for the times, as the retirees of 30 years ago mostly had roots in small towns or rural locales and living in close proximity to large urban areas was relatively unimportant.
What’s more, this was before the enactment of the Canada Health Act when doctors were still in the market for new patients and a move away from a large city like Toronto did not mean having to relegate one’s healthcare to walk-in clinics or emergency rooms.
By the late 1980s a new cohort of retirees had entered the adult lifestyle market. This group was definitely looking for larger, better-appointed housing and did not mind paying for it. It was difficult in those days to convince developers of adult lifestyle communities to go out on that limb and design a larger house that actually included a basement and a garage. But those who did benefited in a big way.
Throughout the 1990s these communities continued to be generally located within about a 90-minute radius of large urban areas. That’s because land costs were substantially less, as was the cost of construction. So developers could offer homes comparable to what one might find in or near large urban areas at a substantially lower price.
With the advent of the baby boomers, this market has begun to take a new direction, one that I believe is reflective of a number of factors. First, I’m of the opinion that the baby boomer generation is generally youth obsessed and as such is reluctant to move to a community whose primary residents are older people. Baby boomers are not as budget conscious as their forebears of two decades ago and they tend to be much more hedonistic. As a result many are planning to spend their retirement years in the relative luxury of an urban condominium, a move made possible through the sale of a high-value detached city home. This allows for the maintenance of all social ties, as well as ready access to their existing healthcare providers.
Evidence of this shift is readily apparent, certainly among clients that our company services. One of our clients who manages a fabulous land lease community west of Toronto, recently comment on how their market profile has changed. Where once upward of 90% of their residents moved out of the Greater Toronto Area (GTA) into this quaint rural community, today all their new residents originate locally.
Another client, who over the years has built over 600 adult lifestyle units in a small community west of the GTA has noticed that traffic to his site has declined dramatically. “I believe there are several factors at work,” he said during a recent discussion about the nature of his market. “First, a move to our community offers modest amenities compared to the big city. While purchasers can get a greater bang for their buck in terms of the house they purchase here, there are some unattractive trade-offs, such as the limited access to healthcare and reduced shopping opportunities.”
If I were to venture an educated guess about the future of adult lifestyle communities, at least in Southern Ontario, my guess would be that baby boomers will not flock to them en masse. I suspect their retirement choices will be more complex, involving more than one residence. Typically this could be a condo in the city and a chalet in ski country, a cottage up north, or a place in the sunny south. I think baby boomers tend to be too free-spirited to conform to the rules and regulations that govern life in an adult lifestyle community.
In addition, baby boomers also have a lot more money available owing to the “massive transfer of wealth” they stand to inherit from their parents. I’m sure there will always be adult lifestyle communities in and around Southern Ontario, But they will hardly be as popular or mainstream as they were a decade ago.
Klaus Rohrich is President and Creative Director of Taylor/Rohrich Associates Inc., a marketing and advertising firm that specializes in niche marketing retirement real estate developments
http://www.maturitymarketing.com.
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