August 11, 2020 | city vs suburbs
If you’ve been following any real estate news over the past few months, you may believe there is an exodus of people leaving the city. Not just in Toronto, but all over the North America. Covid is leading the city folk, like the pied piper, out of the city to where there are open fields and more than 6 ft of space everywhere between you and anyone else. No doubt there have certainly been some adjustments. Quarantines in March, April and May really made many of us look hard at the space we live in since we were spending nearly all of our time there.
Then there were the changes in how many of us work. After working in an office and leaving our homes for a good portion of the day, we found our work and after-work life all ended up in the same spot. Add children for some, and the property you live in has taken on a much bigger role in your life. So, it’s not surprising that people have been revisiting how they use their homes and what they need from them.
On top of all that, all the benefits of living in a city like Toronto are not fully available to us at the moment: no restaurants for a long time (though amazing take-out), no festivals, Pride Parades, Caribana, sporting events, music events or any large gathering. Going to the gym was not an option until very recently for those of us who wish to venture there. Even in Stage 3, the perks of the city are not anything like pre-Covid times.
This has led many to believe that there is an exodus of people from Toronto because some of the best things about living in a city are not as available to us. And to some extent, it is true, but not anything like what people seem to be imagining. There is no exodus. Just some re-arranging. Let me explain…
There has certainly been an uptick in people who wish to buy in cottage, country or secondary homes this Spring and Summer. This may have more to do with the fact that travel has become so restrictive, people are looking to get out of the city and vacation a lot closer to home. Cottages feel more like an oasis this year more than any other in awhile. Plus, it’s not very easy or safe to travel very far these days. To be clear, many people are buying secondary properties. They have not abandoned their primary homes in the city.
Of course some are leaving for good. Covid may have accelerated the plans of people who were already leaning toward leaving the city. Covid just gave them more of a push to do it sooner. As an example, some saying good-bye to the city and are retiring a few years earlier than originally planned.
But here’s the thing that doesn’t get much mention. The way that Covid-19 has changed our real estate habits is happening in the city as well. I do agree that people want more space after having been in quarantine for so long. But that doesn’t mean you need to leave the city. If you were planning on moving up from a condo to a house in two years, you may have decided to move that process along sooner after being at home so much in a smaller space. That’s why houses, particularly detached ones, are rising faster in price than condos. Toronto detached house prices are up from July 2019 to July 2020 by a very impressive 25.5%. That does not sound to me like people are leaving the city. But it does tell us that they are craving more space.
Does that mean everyone is deserting condos for houses? Not necessarily. I’m seeing much more interest in condos with a +1 so that buyers can have an office space at home. I’m seeing more interest in less dense condos, boutique and townhouse condos than high rise ones.
I think there has been a subtle shift with how people live and buy real estate because of Covid-19, but I don’t think everyone is leaving the city.
I do agree some Toronto offices of all shapes and sizes may see some permanent shifts with how and where their employees work. There will certainly be a shift toward many more people working from home, even after Covid-19. Employers will save in rent costs, but I wonder if building any kind of comradery could be built over zoom. It’s going to be hard to build a work culture when no one is working together. Also, the early joys of not commuting and being able to make your own lunch are now turning into cabin fever and a desire to see more human beings. We are social creatures. Even the most introverted among us may be requiring more human interaction. So, I’m still not sure working from home will be a long standing trend in the years ahead.
When we do return to some kind of normal after Covid-19, whether that’s the end of this year or years from now, I think we will see some permanent changes to Toronto real estate. And it is difficult to see what kind of direction real estate will take from month to month depending on how this pandemic plays out. I do believe, however, that cities won’t be emptied out. People want to live here for a reason. Those who live here are urban-oriented, and they want to be here, not in the suburbs. And in some ways, desiring more space is not new. This was happening long before Covid-19. Some people leave the city for the suburbs for more space. Some prefer to stay in the city in smaller spaces. Just depends what works for you.