Senior Housing Market Soaring

Hello subs, today’s article is about the impact the pandemic and other supply-related issues are having on the senior housing market and its soaring demand and valuations.

Despite the negative impacts of COVID-19, the senior housing market is soaring. What was once considered a niche asset class, has become a more mainstream product.

Senior Housing Market Soaring Investment Numbers

The total investment volume for the past two quarters alone will match the all-time annual record for 2015. This 2015 record is set at $4.6-billion. The average annual volume of senior housing investment in Canada is in the $1.7-billion range. However, in just half a year, this sector saw double the volume. There is no indication that this momentum will slow its pace. This “needs demand” sector seems to be the only real estate class that is quantifiable. During the five years prior to COVID-19, Canadian senior housing occupancy rates were around 92 percent. However, over the last two pandemic years, these rates fell to a historic low of 85.5 percent. Projections stipulate a return to pre-COVID rates by early 2024. Further growth is expected to be 95 percent by end of 2026. This comes as a result of the 85-plus cohort growing exponentially.

Senior Housing Market Soaring and the Future

This sector is crucial and will become even more so over the next 20 years. The 85-plus cohort is set to double-and-a-half, 150 percent. This industry’s resilience has proven strong during the recession as well as COVID with the ability to rebound. Investors are attracted by the high returns. In 2021, the national average was 6 percent. This average is double that of other popular asset classes (industrial, apartments, offices). Consistent high occupancy rates are another factor making this asset more valuable.

Current STATS

A one bedroom, private, “independent living” seniors home is currently $5,284 in Toronto. This same bedroom is $4,907 in Vancouver and $4,323 in Calgary. Montreal comes in with the least expensive rent at $1,888. Around 9 percent of Canadian Seniors live in some type of seniors residence. Quebec has the most “active living” units of seniors apartments. These are basically a typical complex but with minimum-age requirements. Developers are intrigued by this new product and the way retirement residences have changed dramatically recently. One particular property developer sees the future of seniors in communities that include posh-active-living apartments. A mini-town catering to a demographic that leads active lifestyles is the ultimate vision.

To view this full article and read more on this topic, visit the Globe and Mail at Investment in seniors housing soars despite pandemic’s negative impact – The Globe and Mail.

For up-to-date real estate information as well as current listings, visit our website at XLR8 Realty.