If you own property or are looking to buy some, you should take a look at a book that has been on Canada's best seller list for several months. "Boom, Bust and Echo: How To Profit From The Coming Demographic Shift", by David K. Foot with Daniel Stoffman, has interesting comments to make on the history of Canadian real estate in the over the last two decades and suggests good times are available to the wise purchasers in the next millennium. The book takes a serious look at the demographics of the our nation, separating us all into three major categories (Boomers, Busters and the Echo Generation), and chronicles how each has and will continue to affect all of our lifestyles in Canada.

For the longest time, realtors told us that the three most important factors affecting real estate were: location, location, location. In addition, we all know that interest rates, taxation, time and quality each have an important effect on the market as well. To my knowledge, no popular business speaker other than Foot, has ever concentrated on how the demographics influence our lives.

In order to follow the logic of "Boom, Bust and Echo" one has to know something about each of the most recent three generations of Canadians and our typical life cycles. The Baby Boomers, Canada's largest generation, started just after W.W. II and ended around 1966. Baby Busters followed from the late 1960's through 1979 and of course Echo follows in the 1980's to the mid 1990's.

Typically, most Canadians enter the work force at age twenty or so, move away from home, first become renters and a few years later start to buy houses. In the twenty years from 1967 to 1986 the boomers, almost one third of Canada's population, entered the labour force. The early baby boomers should have started buying homes around 1980. For many, however, a recession coupled with interest rates of eighteen and twenty percent and a government initiated residential rent control program postponed this move to the market for a couple of years. This huge group became house purchasers in earnest in the middle of the 1980's. By the time they reached 40 or so, the boomers were ready for a move upwards.

In our major centres, the influx of this, by far our largest generation to the workforce and housing markets, caused a huge increase in demand for office space and high rise apartment and condo construction not to mention single family and low density home construction in the suburbs. Our landscapes and city scapes were changed forever. Locally subdivisions were started and quickly filled. Riverdale expanded, Sunrise Acres grew, and then the Lochiel/Chelsea Crescent area sold out in relatively short order. Baby Busters, the next and much smaller generation, born in the 1970's, entered the work force in the early '90s. These fewer people needed fewer apartments. As well, we should have recognized that with a declining increase in population, we would need less commercial work space in the late 1980's. Because we didn't understand demographics, we failed to recognize these fewer new workers would need less work space and we kept building. The recession of the early 1990's with many more people losing jobs than finding work, further reduced the need for commercial and industrial real estate. Today's technology with automation, smaller computers, sophisticated communication coupled with increased building operating costs, meant large offices were not necessary. We see this in Cornwall with many tenant relocations. Companies with leaner workforces and improved office equipment, choose to relocate to more modern, technologically advanced, albeit smaller office space for the same budget as their former locations.

The job losses from global rationalization and the recession have, when coupled with the much smaller "Bust" generation, left us with an oversupply of rental units increasing the vacancy rates and lessened the demand for other forms of housing.

So where are we going? Can we return to the mid 1980's where prices were increasing year after year? Is there an end to the slide in many markets? The "Echo" generation born in the 1980's will at the turn of the century become our renters. This generation, the children of baby boomers, is naturally quite a bit larger than the last and as such will once again put some pressure on vacancy rates and we will likely see an increase in rents or an increase in apartment construction.

Little new housing was built in the early 1990's and the recession eroded consumer confidence. Today, with inflation in check and our unemployment rates declining, Canadians have a more positive attitude towards the future and a pent up demand to buy. The late 1990's may provide a mini price boom as generation "X", purchase homes. After this blip, house prices will likely level off and real estate will again be purchased more for its utility than its investment potential. In the next millennium it will become increasingly important for buyers to purchase the right property at the right time for the right price.

Boomers will remain the most affluent members of society and as a result, the subdivisions where this group currently resides, will continue to do well with only one down side. The homes in these areas are getting older. On the plus side, the lots are large and the homes spacious. As the demand for rental accommodation heats up and the size of boomer families decline, many homes may be renovated to luxury flats.

Other boomers may choose to relocate to smaller homes in the city and purchase a second often larger recreation home outside the city. Thus, leisure and recreational markets should remain strong. As baby boomers begin to consider retirement, many are expected to leave larger cities and move to smaller centres. Some smaller centres for example: Elliot Lake, in northern Ontario have already focused on retirement as a means of profiting in the next Millennium. It may be that: location, location, location, which we have long touted locally as one of our best advantages to industry will, if we act smartly and quickly, be our region's salvation.

I say region because most of us are not expecting to move into city centres, but rather to live on small acreage in close proximity to recreational facilities such as golf courses, the waterfront and the like. The front end of the retiring boomers will continue to want to be close to good restaurants and shopping and entertainment. Once again Cornwall is ideally poised to suit those needs. With Montreal and Ottawa only an hour away, baby boomers accustomed to long daily work commutes, will be in a position to take advantage of Cornwall's superior municipal infrastructure and low cost economy, while retaining easy access to the big city theatre, sporting events and the like.

Health care will be vitally important and those centres which manage to preserve and protect hospitals and other health centres, which today are viewed as a burden, will be in good stead in 2010. Cornwall will have to be very careful when it comes to selecting the hospital model for the future. Cornwall Economic Development recognized the impact of these demographic forces several years ago and began to shift from a focus on industrial development to a much more balanced platform. A small business self help office was opened and information was gathered to facilitate lifestyle relocations. Most recently, their Montreal marketing efforts drew significant enquiries re: home relocation over 250 requests for information. This program should be continued and local businesses and organizations should work toward providing the Economic Development Department with the tools it needs to encourage those looking to relocate here. Recently, the Cornwall and District Real Estate Board introduced its MLS Marketplace magazine and local real estate offices have ensured that Economic Development has current copies available for distribution. By supporting and expanding this program and by paying particular attention to our future health care needs, with a look towards the future needs of baby boomers, we may in fact end up with the greener community most us want. In addition, we will also improve local employment opportunities for our upcoming Echo Generation and perhaps finally attract the health care professionals we so desperately need today and tomorrow.

As these affluent Baby Boomers approach retirement and start looking for greener, cleaner and less hectic pastures, Cornwall, Stormont, Dundas and Glengarry counties will be given a more than cursory look. We had better be prepared for that look. The time line is short and we may not get a second look. Cornwall must be planning today for tomorrow's retirement community needs. The move from big cities to smaller cities will come. Let's be ready.

Terry Landon is Vice President and the Broker of Record of RE/MAX Cornwall Realty Inc., Real Estate Brokerage, a founding Director of the Real Estate Council of Ontario, Past President of the Cornwall and District Real Estate Board and a proud member of Team Cornwall.

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