Talk of the Canadian housing market is wont to veer toward the bloated markets of Toronto and Vancouver. But while it’s true that more affordable houses can be found elsewhere, home prices are increasing in many cities across the country, especially in those markets saturated by people employed in a metropolis, but who are more willing to commute than pay for accommodation there.
Most often, it’s young people who are thought to be locked out of the housing market. However, as the population as a whole continues to age, many seniors are facing affordability concerns, and therefore a comparable problem.
It is specifically the empty-nest group (childless older people, or older people whose children has moved away), according to a release by News Wire, who are most commonly facing the prospect of downsizing to a smaller dwelling.
Traditionally, downsizing one’s home involves moving to a smaller home or a cooler market, or downgrading to a townhouse or condominium. But even these classifications of home are growing less affordable, while offering “less home.”
An emerging trend, according to the same press release, is “land lease,” where people purchase a home, but not the land on which it sits. This is attractive to many seniors from a practicality point; much of the upkeep, like cutting the lawn, is taken care of. It’s also attractive from a price point, as such homes tend to cost 30% less than their traditional counterparts.
Of course, not owning the land your home sits upon comes with certain drawbacks, mostly akin to those of owning a condo. The owner possesses less of a legal claim to their dwelling and does not benefit (or benefits less) if the value of the land increases during their occupancy.
Still, forfeiting those aspects of traditional homeownership is an easy pill to swallow for those in a financial crunch. This is evident from the fact that one owner of land lease communities, called Parkbridge, operates 115 such communities around the country.
Should prices continue to block out young people and sap the finances of the older generation, it is not unfathomable that the trend of land leasing will continue to rise.