The head of retirement and long-term care home operator Sienna Senior Living says the already-strong demand for senior housing is expected to grow significantly in the coming years as Canada’s population ages.
“People are now understanding that this demographic shift is happening,” Nitin Jain, Sienna’s president and CEO, told BNN Bloomberg in a Monday interview.
“We are now seeing baby boomers in our retirement homes and long-term care homes, so we have this incredible demand for that, and because of interest rates and construction costs, the sector has not built enough senior homes.”
Jain said that the rise in demand is coming mainly from those aged 85 and older, as Canadian seniors are living longer and healthier lives than previous generations, with many deciding to stay in their homes for as long as possible before looking at alternatives.
“People are staying in their homes longer… people are living longer, they’re living healthier, and they’re really choosing retirement homes and long-term care homes for the next phase of their life,” he said.
With the number of Canadians 85 or older expected to triple over the next few decades, according to Statistics Canada, Jain said he’s optimistic about Sienna’s growth outlook.
Investors seemingly share that sentiment – the stock is up more than 40 per cent so far this year, outperforming the broader S&P/TSX Composite Index by a wide margin.
Jain said that while developers and governments now have a better understanding of the shifting demographics within the Canadian population, it will take time for supply to catch up with demand, as construction of new residences was hampered by high costs and interest rates in recent years.
“And unlike many other asset classes, this asset class takes a long time to develop. So, if you and I decide to open a retirement home today, it’s going to take us five years, and that’s on a fast track when the first resident would move in,” he said.
“So, because we’ve had this lag, the incredible demand and dwindling supply is here to stay, at least for the next five or six years.”
