The numbers tell a story most people do not want to hear.

According to the Canada Mortgage and Housing Corporation’s November 2023 report, the sell rate among homeowners aged 75 and over has fallen about six percentage points in the past 30 years.

These are not people who bought homes they could not afford. These are people who stayed in homes that became unaffordable.

The average Canadian homeowner now spends approximately $12,000 annually on household maintenance. Prices for homeowners’ maintenance and repairs increased by 19.2% from September 2018 to September 2024. Renovation costs surged by over half—55.4%—during the same period.

The issue is not income. The issue is that non-mortgage costs—insurance, property taxes, utilities, routine maintenance—have increased faster than incomes. Over 45% of Canadians reported being very concerned about their ability to afford housing due to rising costs in 2024. Even homeowners with paid-off mortgages are feeling the pressure.

I used to think downsizing was about space. After analyzing the data and working with hundreds of clients, I realized it is about timing.

The Pattern Most People Miss

Most Canadian homeowners wait until downsizing feels like defeat.

The data shows a clear correlation. People who downsize proactively report feeling less stressed, more content, and less burdened overall. One study found that couples who downsized together experienced a boost in relationship satisfaction.

People who wait report the opposite.

The most common regret among aging homeowners is not moving while they still had the physical ability to do it. Sorting through decades of belongings becomes overwhelming past a certain point.

When done proactively, downsizing can be liberating. When done too late, it feels like defeat.

That is the pattern.

The Four Variables That Determine Timing

After reviewing the research and tracking client outcomes, four variables consistently determine whether downsizing works or fails.

Spatial mismatch. The home feels too big or empty. Rooms go unused. Maintenance feels disproportionate to actual living space utilized.

Maintenance burden. Physical or financial strain from upkeep. In 2022, 7.3% of all Canadian households were living in housing in need of major repairs, such as defective plumbing or electrical wiring. Nearly one in four households—24%—needed minor repairs. Maintenance costs continue escalating, with renovation prices increasing 55.4% from 2018 to 2024.

Capital reallocation. Equity locked in the home could fund retirement, healthcare, travel, or investment portfolios. By 2024, approximately one in five Canadians were aged 65 and older. Many own their homes outright. That represents enormous equity sitting idle.

Lifestyle simplification. Reducing physical and mental clutter. Studies show that cluttered spaces correlate with higher stress, poorer sleep, and a lower sense of control.

You do not need all four variables to justify downsizing. You need one that matters enough.

What 2025-2026 Data Reveals About Market Conditions

Canada is experiencing contradictory pressures. Rising costs drive the need to downsize, yet seniors are staying in place longer than ever before.

A 2020 survey found that 86% of boomer homeowners want to live in their current home as long as possible. Meanwhile, 45% of all Canadians report being very concerned about housing affordability due to rising costs. This creates a gap between what people want and what they can sustain.

Downsizing in 2024-2026 focuses on trading excess square footage for flexibility, financial breathing room, and a home that suits how you live today.

The market is not forcing this trend in the traditional sense. Demographics are. But the economic pressure is real.

Baby Boomers began turning 65 in 2011. By 2024, one in five Canadians is aged 65 and older. This demographic shift puts enormous pressure on the housing market.

Yet seniors are less likely to move than the general population. In 2016, only 5.5% of seniors aged 65 to 74 and 4.7% of those 75 and older moved, compared to 13% of the general population.

Meanwhile, homeownership rates among younger Canadians are slipping. The rate fell from 69% in 2011 to 66.5% in 2021. The sharpest drop was among those aged 25 to 39, whose homeownership rate fell from 57.9% to just 51.7%.

This is not a temporary shift. This is a structural change in how people view housing.

The Canadian Challenge: Nowhere To Go

Canada faces a unique problem that makes downsizing harder than it should be.

The resistance to downsizing is not just emotional. It is logistical.

In 2021, 29% of singles and couples aged 75 and older occupied homes with three or more bedrooms. These are people living in houses far larger than they need. But they are not moving.

The reason is simple. There is nowhere appropriate to go.

Toronto realtors specializing in senior clients report the same pattern. Seniors have the equity to downsize and make a purchase. But they are deterred by the lack of appropriate housing available. The options are condos with expensive monthly fees, retirement homes, or long-term care facilities—which now carry negative associations after the pandemic exposed poor living conditions.

Many seniors report that none of these options are attractive. Most want to stay in their neighborhood, shop at the same grocery store, and remain near their community.

The supply of suitable downsizing options—smaller single-family homes, townhomes, or well-designed senior-friendly condos in established neighborhoods—has not kept pace with demand.

This creates a market failure. Seniors who want to downsize cannot find appropriate housing. Young families who need larger homes cannot access them because seniors are not selling. The entire housing market locks up.

The Canadian Mortgage and Housing Corporation acknowledges this issue. Solutions aimed at increasing supply from existing units—like creating secondary suites or laneway homes—could help. But these solutions take years to implement at scale.

If you are considering downsizing, this constraint means you need to start planning earlier and be more flexible about location or housing type than you might prefer.

The Psychological Barrier No One Talks About

The hardest part of downsizing is not the logistics. The hardest part is reframing the decision.

Most people view downsizing as giving up space. That framing creates resistance.

The data supports a different interpretation. Downsizing is gaining freedom and peace of mind.

Many Canadian baby boomers report that after downsizing, they feel more organized, less stressed, and financially empowered. Downsizing represents less about sacrifice and more about choosing a lifestyle that aligns with current priorities.

Living in a smaller space can improve mental health by simplifying life, reducing clutter, and fostering a focus on essentials. The reduced financial burden and minimalism associated with smaller living alleviate stress and enhance wellbeing.

Studies show that living in a tiny home encourages a minimalist lifestyle, which leads to reduced stress and anxiety. Minimalism supports sustainable behaviors, increases emotional wellbeing, and allows more time and resources for personal interests or hobbies.

The issue is not the space. The issue is the attachment to what the space represents.

You have to separate the house from the identity.

The Five-to-Ten-Year Window

Downsizing before retirement by 5 to 10 years can help Canadian homeowners save thousands of dollars each year and better prepare for transition costs like repairs, moving expenses, and closing costs.

That is the optimal window.

Most people miss it.

The reason is simple. Five to ten years before retirement feels too early. The house still works. The maintenance is manageable. The financial pressure has not reached critical levels.

But that is exactly when you should move.

Early planning significantly reduces stress and decision fatigue during major life transitions. This principle applies beyond real estate to any significant life change requiring multiple coordinated steps.

The people who wait until the house becomes unmanageable are the ones who report the most regret. The physical ability to sort through belongings diminishes. The emotional energy required to make decisions depletes. The window of opportunity to enjoy the benefits of downsizing closes.

When you downsize proactively, you control the timeline. When you wait too long, the timeline controls you.

The Four-Step Framework That Actually Works

After working with dozens of clients through this transition including our own parents (and soon us,) I have identified a framework that reduces stress and increases satisfaction.

Step 1: Plan your timeline.

Most Canadians underestimate how long downsizing takes. You need 6 to 12 months minimum. This includes sorting belongings, preparing the current home for sale, researching new locations, and coordinating the move.

Start earlier than you think necessary.

Step 2: Declutter strategically.

The “keep what truly matters” approach represents a values-based filtering system that prioritizes meaning and utility over accumulation. This decision-making framework can be applied to commitments, relationships, and digital assets, not just physical possessions.

Do not try to declutter everything at once. Focus on one room per week. Make three categories: keep, donate, discard. Do not create a “maybe” pile. That defeats the purpose.

Step 3: Evaluate your new space needs.

Most people overestimate how much space they actually use. Track which rooms you use daily for two weeks. That data determines your actual space requirements.

You do not need a guest room if guests visit twice per year. You do not need a formal dining room if you eat in the kitchen. You do not need a three-car garage if you own one vehicle.

Optimize for how you live today, not how you lived ten years ago.

Step 4: Work with local market experts.

The complexity of real estate markets continues to increase. Information asymmetry remains significant. Successful transitions require specialized knowledge that most individuals lack.

Find professionals who understand both selling larger properties and buying smaller ones in your target market. The transaction dynamics differ significantly.

What This Trend Signals About Housing Markets

The emphasis on “freeing up equity for other goals” reflects a broader shift in how Canadian homeownership fits into wealth-building strategies.

Rather than viewing the primary residence as the primary investment, there is growing recognition that liquidating housing equity can fund more diverse or productive financial goals—retirement, healthcare, experiences, or portfolio diversification.

As downsizing demand increases, there is implicit pressure on developers and architects to create smaller, more efficient living spaces that do not sacrifice quality or functionality. This could drive innovation in modular design, multi-functional spaces, and community-focused housing developments.

The positioning of downsizing as a “fresh start” rather than retreat challenges traditional markers of success. This represents a cultural evolution where lifestyle optimization and personal values supersede conventional status symbols like large homes.

In Canada, approximately 14% of senior households are living in core housing need. Core housing need is a government measure indicating that a household’s housing fails to meet standards for affordability, adequacy, or suitability—typically spending more than 30% of income on shelter costs—and the household cannot afford alternative local housing.

Beyond this technical measure, the broader financial pressure is more severe. A 2024 survey found that 59% of all Canadians—including 75% of renters—are sacrificing basic needs such as food, clothing, and living essentials to afford rent or mortgage payments. This captures housing stress even among those not technically classified as being in core housing need.

Neither trend is reversing.

The Canadians who recognize this early and adjust proactively will have better outcomes than those who wait until financial pressure forces the decision.

The Decision Framework

You do not need permission to downsize. You need clarity on whether the timing is right.

Ask yourself these questions:

Does the house feel too big or empty? If you are maintaining space you do not use, the spatial mismatch is costing you time and money.

Is maintenance becoming a burden? If you worry about emergency repairs or feel overwhelmed by upkeep, the burden will only increase with time.

Could the equity fund better uses? If you have significant equity locked in the home and other financial priorities, reallocation may optimize your wealth position.

Do you want a simpler lifestyle? If you feel weighed down by possessions and responsibilities, downsizing can create the mental space you need.

Can you find appropriate housing in your preferred area? In Canada, this fifth question matters. Research available downsizing options before you commit to the decision. The supply constraint is real.

One yes is enough to start planning. Two means you should move soon. Three or four means you are already late.

What Happens Next

The data shows that people who downsize proactively report better outcomes across every measured variable: financial satisfaction, stress levels, relationship quality, and overall wellbeing.

The people who wait report regret.

The difference is not the decision itself. The difference is the timing.

If you are considering downsizing, start planning now. Map your timeline. Begin decluttering. Evaluate your actual space needs. Research your target market.

Be prepared for limited options. In many Canadian markets, appropriate downsizing inventory remains scarce. Expanding your geographic search or considering housing types you had not initially planned for may be necessary.

The window of opportunity does not stay open forever.

Most Canadians realize this too late. You do not have to be one of them.

The decisions Canadian seniors make about downsizing have consequences beyond their own households. Every senior who stays in a large family home is one fewer property available for younger families struggling to enter homeownership. The homeownership rate for Canadians aged 25 to 39 has already fallen from 57.9% to 51.7%. That trend accelerates when housing stock remains locked up.

Downsizing is not just a personal decision. It is a market decision with ripple effects across the entire housing system.

Sources and Citations are available upon request.

Email: he***@*********ms.ca

Note on Data Sources

All statistics cited in this article are drawn from official government sources (Statistics Canada, CMHC, Canada.ca), peer-reviewed research institutions (OECD), reputable financial institutions (Scotiabank, Deloitte), national housing organizations (Habitat for Humanity Canada), and established Canadian media outlets (The Globe and Mail, Investment Executive). Data collection periods range from 2016 to 2024, with the most recent data from fall 2024.