Housing for Older Canadians: How to Segment the Seniors' Market

OTTAWA, ONTARIO--(Marketwired - Jan. 2, 2014) - In the past, older Canadians - anyone currently living in Canada who is 55 years of age or older - represented a relatively small proportion of the population and often had fairly similar needs and interests. Today, it includes a much wider range of people, from individuals who are still raising children or working full-time, to retirees with a variety of health, wealth and family situations.

Because of this growing diversity, it is important for developers and sponsors of seniors' housing projects to know how to segment the market for older Canadians both efficiently and effectively. To help housing providers identify and meet the needs of today's older Canadians, Canada Mortgage and Housing Corporation (CMHC) has released a new version of its popular report Housing For Older Canadians: The Definitive Guide to the Over-55 Market as an online series of five volumes. Volume 2 provides information on market factors to consider and analyze when contemplating a new housing development targeted to older Canadians. Five key ways to segment the seniors' housing market in Canada are discussed, including:

• Age. Segmenting seniors into specific age groups (for example, pre-seniors aged 55 to 64, younger seniors aged 65 to 74, older seniors aged 75 to 84 and elderly seniors aged 85 plus) can be an important step in completing an accurate market feasibility analysis. In the past, sponsors of long-term care facilities were able to target almost the entire over-65 group. Today, however, the average age at which residents move into retirement homes is closer to 85. As a result, developers who rely on out-of-date data could be overestimating their pool of prospective residents.
  
  
• Lifestyle. Segmentation by lifestyle can identify subtler differences and distinctions than simply grouping people by age. Lifestyle segmentation categorizes individuals according to their interests, opinions and how they prefer to spend their time, regardless of age. Seniors could be segmented based on their degree of independence, desired amenities or health care needs. They could also be segmented based on demographic, consumer behaviour and geographic data which can be combined in order to group households that share certain characteristics, on the assumption that they will also likely prefer the same form of accommodation.
  
  
• Income and assets. Income and assets (of which peoples' homes are generally the largest) can help project sponsors determine the financial resources of their potential residents. This is particularly true for projects such as condominiums or life-lease suites, which typically involve an upfront investment. For these projects, being able to determine the rates of homeownership or the values of homes owned by older Canadians in their areas can help them determine whether the target group can afford the purchase price or ongoing costs associated with a new development.
  
  
• Cultural affiliation. As the ethnic diversity of Canada's population increases, cultural, ethnic and religious segmentation are becoming more common. Just as culturally-based values can influence the purchase of other goods and services, cultural factors can also drive the demand for various forms of accommodation. That said, characteristics such as education, occupation, income and lifestyle can vary widely within the same ethnic community. As a result, it's important when using cultural segmentation to factor in other segmentation approaches as well.
  
  
• Distinct needs. Finally, segmentation based on particular or unique housing needs can be one of the most reliable ways to subdivide the seniors' housing market, especially for projects that incorporate personal or health care services. For instance, developers of seniors-oriented housing will often incorporate certain design features that respond to the social needs of residents, such as gardens, libraries or large common areas. Developers in rural markets are particularly encouraged to consider the needs of their future residents, as rural developments may have to provide more programs and services in-house if fewer options are available in the immediate community.
  
  

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For more information

Download a free copy of Housing for Older Canadians: The Definitive Guide to the Over-55 Market from www.cmhc.ca. For over 65 years, Canada Mortgage and Housing Corporation (CMHC) has been Canada's national housing agency, and a source of objective, reliable housing information.