Like the United States, Canada’s senior housing market is in full swing — good news for many of the U.S.-based senior housing organizations that have looked to our northern neighbor for acquiring assets and conducting market analysis.
Still, matching supply and demand in advance of the expected surge of aging baby boomers will be a major challenge in Canada moving forward, according to the latest CBRE report, “Canadian Market Outlook 2015.”
Previously, CBRE reported a similar supply-demand imbalance in the U.S. in its 2014 Cap Rate Survey, which showed that senior housing supply would have to increase nearly $150% in order to meet peak demand in 2044.
While a surge in demand from baby boomers is some ways off, there will be a major push in Canada to educate this cohort on the changing reality of senior living in 2015, says Sean McCrorie, director in CBRE’s Seniors Housing & Healthcare Group, in the report.
“There’s no one way to retire,” he says. “Expect to receive a new perspective on seniors housing in the years ahead.”
A more favorable view of the sector could lift penetration rates from the current 8.9% of the target market and fuel demand over the coming decade, the report notes.
But investor demand — particularly from U.S.-based organizations — is hardly in short supply.
The strength and familiarity of the Canadian senior housing market, along with low cap rates, has attracted the attention of U.S. and overseas buyers. In particular, two out of the three largest U.S. senior housing investors have made significant purchases in Canada between 2012 and 2014, and they are expected to increase their Canadian holdings in 2015, CBRE writes.
“We’re in the first of nine innings when it comes to seniors housing,” McCrorie says. “This sector has come a long way and the time to seize opportunities is now.”
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Read the full report here.
Written by Emily Study