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Room to move in retirement
Construction boom in seniors' residences has led to high vacancy rate, especially in West Island
DAVID JOHNSTON
The Gazette
Wednesday, June 24, 2009
Le Cambridge, an upscale seniors complex in Pointe Claire. (Gazette file photo)
A decade ago, Montreal's retirement homes were full and many couldn't keep up with demand. But one construction boom later, Montreal-area seniors' residences are struggling with high vacancy rates, especially in the West Island.
In its annual report yesterday on retirement homes in Canada, the Canadian Mortgage and Housing Corporation said the construction boom this decade has pushed vacancy rates up to eight per cent in the Montreal region.
Low financing costs in recent years persuaded many developers to jump prematurely into the retirement-home market - baby boomers haven't turned 65 yet, let alone 75.
The oversupply isn't good news for investors, but it means seniors on the verge of moving into a retirement home don't have to hurry and make rushed decisions. They have the luxury of time and choice on their side - benefits that should continue through the next few years, experts say.
"It's going to take a while for the excess supply to get absorbed," said Bertrand Recher, principal economist of the CMHC's Montreal office.
In Montreal and Toronto especially, some major new upscale projects have been built in recent years - ranging in Montreal from the Le Cambridge and Masterpiece developments in Pointe Claire, to the new LUX Gouverneurs Residences complex near the Olympic Stadium. That complex is owned and operated by by a new subsidiary of Quebec's Hôtel des gouverneurs chain.
The projects take aim at a new generation of relatively affluent seniors that will steadily grow in size over the next 30 years.
"These are people who are going to be willing to pay for quality," said André Casaubon, vice-president of operations for LUX Gouverneur Residences.
Private retirement homes are not subsidized by governments. They are not like so-called social housing for seniors, operated in the public sector mainly by municipalities. Monthly rents in the private sector range from $1,200 to $7,000 a month, reflecting both luxury and levels of medical care offered.
Almost half of all existing rental units in the private sector in the greater Montreal area are one-bedroom units inside apartment buildings. They are the fastest-growing segment of the market. The fastest-shrinking is room-and-board accommodation inside detached homes in residential neighbourhoods operated as group homes for seniors.
In the Montreal region, vacancy rates in private retirement homes are highest in the West Island. Recher said the higher rates reflect the heavier construction boom in the upscale segment of the market.
But yesterday's CMHC study also pointed out that regions with high levels of home ownership, like the West Island, tend to produce lower local demand for retirement-home accommodation. That's because people who own their own homes tend to want to stay in them as long as they can in their retirement years.
Lifelong renters, on the other hand, tend to be more mobile in their retirement years. And since Quebec has lower levels of home ownership than other provinces, it tends to have higher levels of seniors in retirement-home settings. Last year, 17.3 per cent of Quebecers age 75 and over lived in a retirement home, vs. 8.2 per cent outside Quebec, according to the CMHC study.
Annette Ruidy, executive director of the Griffith McConnell Residence in Côte St. Luc, said special "summer-sizzler" prices introduced last year failed to boost rental demand at the facility, and no new discount pricing is planned for this summer.
"There's definitely oversupply in the market right now, across the board, " she said.
djohnston@thegazette.canwest.com
VACANCY HIGHEST IN WEST ISLAND
Yesterday's report from the Canadian Mortgage and Housing Corporation showed private retirement homes on the West Island had higher vacancy rates last year than similar homes in other parts of metropolitan Montreal.
By Montreal region:
South shore 6.0%
Laval 6.8%
East end 7.9%
Montreal centre 9.1%
West Island 14.1%
Montreal metro average 8.0%
Regions in Quebec:
Saguenay 1.6%
Trois-Rivières 5.3%
Quebec City 7.1%
Montreal 8.0%
Sherbrooke 9.7%
Gatineau 17.2%
Quebec average 7.9%
In Canada:
Vancouver 5.5%
Montreal 8.0%
Toronto 14.0%
Canadian average 9.2%
Canada Mortgage and Housing Corporation