One of the biggest trends this year is people ditching the city for the prospect of living in the suburbs. The latest data from TRREB points exactly to that. To be more precise, the number of sales in the 905 area drastically increased because of the number of sales in the 416 area, the city’s center.
The increase in sales in areas such as 905, near Toronto, didn’t go unnoticed even by CondoMapper.ca.
But is it all because of the coronavirus pandemic and the fear of other lockdowns? The first impression is yes, this is all coronavirus related. But a bit more analytical and data-driven approach reveals something else. Something more complicated, according to real estate experts.
Moving to the Suburbs is not a 2020 trend
The truth is that moving to the suburbs has been trending for several years now, not just in 2020. However, it was a trend only limited to certain demographics and directly affected the steaming housing market in Toronto.
The coronavirus pandemic only exacerbated the suburban trend.
Who and why leads the trend?
According to Diana Petramala, a senior researcher at Ryerson University, millennials are asking the push towards suburbs living, whereas the impact of boomers was largely overestimated.
The main drive for the millennials is that they are starting families, and as a result, they need the extra space and comfort. Then there is affordability, which is also a major factor with millennials.
A recent survey conducted by the Mortgage Professionals of Canada revealed the top reasons why renters wanted to buy a house in the suburb:
- They said that they want to live in a nicer home – 28%
- Their home doesn’t suit their new circumstances. This has to do with millennials starting families and hence the bigger space – 14%
- They think that the current situations offer a unique opportunity to get a good deal – 14%
- The low-interest rates are very appealing and make this a great time to purchase a house – 12%
- The need to live somewhere that is less expensive than in the city – 11%
Where do they go?
Another fascinating fact is that the one-hour commute is not the limit anymore as they even look for places beyond that, such as Innisfil and Barrie. Oakville and Burlington might have been the first two choices in the past, but nowadays, people are going even as far as Hamilton.
According to Diana Petramala, Durham is another region that draws bulks of people from the city. Not only that, the entire area is cheaper than Peel and York, but people can trade their Toronto condos for a house there.
Will this trend empty the city of Toronto?
The answer is a strong NO. There are quite a few arguments about why that won’t happen.
First of all, just because immigration slowed down in 2020, it doesn’t mean it won’t continue as soon as the pandemic ends. With all the promising vaccines on their way, it is fair to expect that sooner than later. Ontario’s forecast for a higher birth rate than in the last several years is another reason why the city’s population will only further increase.
Then there is the new generation that comes after the Millenials, and that is favor of urban living.
All in all, the real estate market in the 416 area might not implode, but it is far from being emptied or anything such.