Nearly 7.74 million Canadians are now over 65, making up almost 19% of the population, and that share is expected to climb to nearly 25% by 2030. That shift is pushing more homeowners to think about downsizing — but the reality is far more complicated than simply selling the family home and moving into something smaller. Between falling home prices, high moving costs, and a shortage of suitable smaller properties, many retirees are finding that the math doesn’t add up the way they expected.
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This article is general information only and does not constitute professional advice. For your specific situation, consult a qualified professional.
What the headlines don’t tell you is that downsizing isn’t just about finding a smaller place. It’s about timing, costs, and whether the housing you need actually exists. A recent RE/MAX Canada study found that 73% of potential downsizers are concerned about their options, and 32% are very concerned. That’s not a small hesitation — it’s a widespread standoff between what people want and what the market offers. Here’s what you actually need to know.
Before getting into the details, it helps to pin down what we’re actually talking about. Downsizing in this context means moving from a larger home — often a detached house where children were raised — into a smaller, more manageable property, typically a condo, townhouse, or apartment. The goal is usually to free up equity, reduce maintenance, and lower living costs. But as the research shows, the path from intention to action is full of obstacles.
What I tend to notice is that people assume downsizing is a straightforward financial win. The reality is that it only works well when the numbers line up — and right now, for many, they don’t.
What happens when downsizing stalls
When older homeowners delay downsizing, the effects ripple through the entire housing market. Fewer homes come onto the market for move-up buyers, which in turn limits entry points for first-time purchasers. The RE/MAX research makes this connection clear: a lack of suitable housing for older Canadians is a key constraint slowing turnover across the housing ladder.
But the personal stakes are just as high. Three-quarters of seniors surveyed by Bloom Finance said that supporting family members is cutting into their retirement savings. That’s a significant number — 510 Canadians aged 55 and older, all members of the Angus Reid Forum, reporting that financial help to adult children or other relatives is eating away at what they’d set aside. Some retirees are delaying relocation specifically to continue that support longer than they’d planned.
There’s also a timing problem. Economic forecasts predict a housing market rebound later in the year, but many would-be sellers want to wait until the market hits its lowest point before moving. That creates a standoff: nobody wants to sell at the bottom, but waiting for a recovery means staying in a home that may no longer suit their needs. The result is that the downsizing conversation keeps getting pushed further down the road.
Where the downsizing plan breaks down
Assuming the right home exists
The single biggest gap isn’t willingness — it’s availability. Nearly half of all Canadians report low availability of downsized housing options, and 8% report no availability at all. Among those 65 and older, 65% say suitable smaller homes are hard to find. For years, developers focused on building units that don’t match what downsizers actually need. Many condos built at 450 and 550 square feet were never designed as long-term solutions for older adults who still want space for guests, hobbies, or simply room to move.
Underestimating the cost of moving
Friction costs — Realtor commissions, land transfer taxes, legal fees, moving expenses, and any renovation work on the new property — can eat up to 15% of your sale proceeds. On a $700,000 home, that’s $105,000 gone before you’ve even settled into the new place. That’s a huge chunk of equity that many people don’t account for when they imagine downsizing as a cash windfall.
Ignoring the emotional and practical weight
Tim Syrianos put it plainly: “People who are living in larger homes find it very hard to find a reason to move because they can’t find suitable housing that is smaller.” It’s not just about square footage. It’s about leaving a neighbourhood, a community, and a home full of memories. When the alternative feels like a cramped condo with no storage and thin walls, staying put starts to look a lot more appealing — even if it’s not the financially optimal choice.
Forgetting that equity isn’t guaranteed
Home prices are off significantly from their 2022 peaks. If you bought decades ago, you’re still likely ahead. But the amount you can actually walk away with today may be far less than what Zillow or your neighbour’s sale from three years ago suggests. That gap between expectation and reality is one of the biggest reasons downsizing plans get shelved.
Making downsizing work in today’s market
Run the real numbers before you decide
Start with a full accounting of what you’d net from a sale. Get a current market valuation from a local Realtor — not an online estimate. Then subtract all the friction costs: commission (typically 4–5% in Canada), land transfer tax (which varies by province but can be thousands), legal fees, moving costs, and any immediate repairs or staging expenses. What’s left is your actual equity. Compare that to the purchase price of a suitable smaller home, plus the same friction costs on the buy side. If the gap is smaller than you expected, downsizing may not deliver the financial relief you’re counting on.
Look beyond the obvious property types
If traditional condos feel too small, consider alternatives. Some developers are starting to build larger two-bedroom units with den space, better storage, and in-suite laundry — features that matter more to downsizers than to first-time buyers. The condo market in Canada has shifted, and not all units are created equal. Townhouses, garden suites, and even co-housing arrangements can offer more space and community than a high-rise condo. The key is to visit properties in person and spend time in the neighbourhood before committing.
Time the move to your advantage
If you don’t need to sell immediately, you have flexibility. Waiting for a market rebound could increase your sale price, but it also means living with uncertainty. One approach is to sell first, rent temporarily, and buy when the right property appears. That avoids the pressure of a simultaneous purchase and sale, though it adds moving costs and the hassle of a temporary rental. Another option is to buy the new property first if you have the financial capacity, then sell the old home at your leisure. That’s more expensive upfront but removes the timing risk.
Consider the long-term cost of staying
Staying in a larger home has its own costs: higher property taxes, more expensive utilities, maintenance and repair bills, and the physical toll of upkeep. A large digital safe for storing important documents and valuables is a small example of the kind of practical consideration that comes with any move — but the bigger point is that staying put isn’t free either. Add up what you’re spending annually on the current home and compare it to the projected costs of a smaller property. Sometimes the financial case for downsizing is stronger than the sale price alone suggests.
Frequently asked questions about downsizing in Canada
What percentage of Canadians over 65 actually downsize? ▾
How much does it cost to move when downsizing? ▾
Why aren’t more downsizing options being built? ▾
Should I sell now or wait for the market to recover? ▾
Can downsizing help my adult children financially? ▾
What’s the biggest mistake people make when downsizing? ▾
The real question isn’t whether to downsize — it’s when and how
The downsizing wave that everyone’s been expecting hasn’t arrived, and it may not for years. Between low availability of suitable housing, high moving costs, and reduced equity from falling prices, the conditions simply aren’t right for many retirees. But that doesn’t mean the decision should be shelved indefinitely. The population is aging, demand for smaller homes will eventually reshape the market, and those who plan ahead — by understanding their true equity, exploring alternative property types, and timing their move carefully — will be in a stronger position when the market shifts.
Remember: this article is general information only. For advice on your specific situation, speak to a qualified professional.
If this was useful, you might also want to read Why More Canadians Are Moving to Smaller Towns and Rural Areas.
Sources and Further Reading
Will Canada Ever See Affordable Housing Again? — Explores the broader housing affordability crisis that shapes downsizing decisions.
Canadian Mortgage Trends (2026). Millions of Canadians are nearing downsizing age — but it may not unlock housing supply. 🔗
Canadian Mortgage Trends (2026). Not the Right Time: Retirees Delay Downsizing Plans as Housing Market Slumps. 🔗
