Posts Tagged ‘CMHC’

The Hidden Gems in Net Worth Analysis

Tuesday, May 10th, 2011

A few months ago CMHC released a report called Changes in Net Worth in Canada, 1990-2009. Although I am just as interested in net worth as the next person, the report does not exactly make for riveting reading. Notwithstanding, there are lots of interesting bits and pieces of data.

For example, the highest net worth individuals are those between 45 and 64. I suppose that isn’t really all that interesting because it is basically what you would expect. In 2005 the median net worth of those households was $310,000 followed very closely by the 65+ group with a net worth of $309,000.

Average net worth is much higher than median for both groups–$551,000 for the 45-64 group and $491,000 for the 65+ group. Average net worth increased faster than median net worth between 1999 and 2005 (29.5% versus 21.5%), suggesting that inequities in the distribution of net worth increased over this period.

Although not available on an age-specific basis, tenure comparisons indicate very clearly the disadvantaged position of renters. In 1999, a typical homeowner was 18 times wealthier than a typical renter. By 2005, the typical homeowner was 24 times wealthier! The gap between those two groups has been widening for at least 20 years.

Part of that disparity of course is due to patterns in the real estate market. Home equity grew more rapidly than other sources of wealth in the 2000s, exacerbating the disadvantaged position of renters.

For all of our readers interested in Saskatchewan, and I hope there are many, I will be spending almost a week in Saskatoon starting on Sunday and will report back via the blog. One fascinating thing I already know is that on a per person over the age of 65+ basis, there are 10 times as many life lease units in Saskatoon as there are in the entire Lower Mainland. Pretty amazing.

Another amazing thing is that some of the seniors’ housing projects in Saskatoon have such long waiting lists they have instituted waiting lists for their waiting lists. One place for example told me that they were going to open their waiting list for additional names in August! I assumed August 2011 but who knows? What is the reason for such amazing success?

Stay tuned!

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Posted in Future, Housing Market, Life Lease, Seniors' Housing | Comments Off

Capture Rates

Friday, March 11th, 2011

I have been having a dialogue with one of our clients about capture rates, sometimes called saturation rates, sometimes called penetration rates. They are calculated as the number of units of private pay service-enriched housing (supportive housing and assisted living) in a market area compared to the population over the age of 75. Years ago when CMHC first started publishing its Seniors Housing Reports (it’s hard to believe but we have them going back to 1999), I used to think about the capture rates they published as less than illuminating. I used to think: “well what if the number of seniors housing units in a market area is entirely sub-optimal?”

Back then that question made some sense. Does it still make sense?

Yes and no. We often use a saturation rate of 5% to indicate a more or less healthy market and usually that works pretty well. But there are communities that can absorb higher numbers of units without creating excessive vacancies. Kelowna for example, with a saturation rate approaching 10%. The rate in Kamloops on the other hand is a shade under 5%. Both those markets appear to be in reasonable shape.

But sadly, one of the key ingredients in this equation is the health of local markets and that is a very very hard thing to be sure about. We recently did some work in Nanaimo for example and almost every single operator reported an occupancy level of 85%. Is that just a wild coincidence?

The saturation rate in Nanaimo by the way varies from 11% if you consider the total number of units to 9% if you consider the number of occupied units. And of course that is exactly what you should be considering, if you could find out what that number is of course. I am guessing an overall occupancy level of 80%.

So Nanaimo’s saturation rate is high but Nanaimo is one of those communities that is appealing to seniors. Although the population of Nanaimo and Kamloops is almost identical, the 75+ group accounts for 8.6% of the population in Nanaimo compared to 6.4% in Kamloops.

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Posted in Housing Market, Seniors' Housing | Comments Off

Why it Would be Wonderful to be a Seniors’ Housing Market Analyst in the USA

Wednesday, September 1st, 2010

I have made this point before several times (about the vastly superior information on the US seniors housing industry) but I was struck anew by the disparities between our two countries earlier this week. The wonderful National Investment Center is celebrating its 20th anniversary. It also has a new Research Director. In a recent newsletter, the Research Director talked about some of the directions he wants to pursue over the next few years. Here are some of the things he said:

Given the ever-increasing interest in our sector, we’re working to stay ahead of the curve, so to speak, by anticipating the research needs of our industry’s participants and prospective participants. Therefore, our top research priority remains the product enhancements associated with NIC MAP. That includes not only a forthcoming tool for portfolio benchmarking but also thereafter reports providing local trends analyses. In addition, NIC MAP reports soon will incorporate detailed sales transactions metrics, and we look forward to regularly reporting market effective rents, which incorporate any leasing promotional discounts. Later this year, in our ongoing effort to disseminate insightful and timely industry research, we’ll publish the inaugural edition of the NIC Investment Guide 2010 that will serve as a primer on our property sector and has been proclaimed by a number of the draft document’s reviewers as an unprecedented comprehensive overview of our industry.

[NIC Map is a quarterly data and analysis service that collects and disseminates a broad range of information on the seniors housing industry in the top 100 metro areas in the US.]

From a Canadian perspective, that is just an incredible goal. We are so far behind the curve we have no idea if it even exists or if we are in danger of driving off the road.

Here’s what I mean. Over the last few weeks it has become apparent that one of the sub-regional markets we track in the metro Vancouver area is very soft—much softer than any of the operators will admit to and much softer than the CMHC Seniors’ Housing Report indicates. The CMHC report indicates that the vacancy rate in this area is well under 10%. Legitimate people (ie real people, not mystery shoppers) seeking accommodation in this area have been led to believe that there are very few vacant units available and that anyone wanting a unit needs to act fast. If we were mystery shopping the area we would be told the same thing, although we are a lot more sceptical about what marketing people tell us.  We look for other signs confirming the official story but often it is very hard to tell what the true vacancy situation is.

Rather disconcertingly, reliable information indicates a vacancy rate in this area that is approaching 20%. I can understand the motivation of the marketers: telling people you have a vacancy rate of 15% can be discouraging to prospective residents.

But the enormous difficulty of trying to truly understand the market means the signals to operators, developers, lenders, and analysts are confusing or contradictory or both. Not to mentions disingenuous to the consumer.

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Posted in Market Studies, Marketing, News, Seniors' Housing | Comments Off