2020 has been quite a turbulent year for the Toronto real estate market and we can only hope that the New Year has better things in store. While we don’t have a crystal ball handy, here’s what the experts are predicting for 2021.
People Will Prefer Smaller Centers To Major Cities
The pandemic and the ensuing lockdowns have turned the table on how we live, play, learn, and even work. Even with a return to work back on the tables, a lot of employers and employees are still having qualms about returning to offices just yet. With work policies becoming more and more favorable for remote working, a lot of people are realizing that they no longer need to live in the proximity of their offices, and can even look into properties outside the major hubs. Experts are predicting a shifting proclivity towards suburbs in the post-pandemic period. More and more people will leave big cities and move towards smaller cities and even suburbs. People who were hitherto willing to purchase a $600,000 one-bedroom condo in downtown Toronto are now realizing that they can even work from home in Barrie, Ancaster, or Guelph, in a much better home. If you too are thinking about leaving the city, keep your eyes open.
Creating 18-Hour Cities Across Canada
Partly due to affordability and space, a lot of Canadians are now thinking about moving to rural and suburban areas, as we just discussed above. With remote working becoming less and less a taboo, more and more people are looking to escape dense cities and move to regions that offer them peace of mind and more affordable and spacious housing. Remote workers can even move to the suburbs, which explains the recent explosion of the “18-hour city” trend across Canada. Due to accelerated growth in major cities such as Toronto, Montreal, and Victoria, these so called “cities” may just be the perfect solution. If you are unaware of the term, 18-hour cities can be described as mid-size cities boasting higher than average population growth, attractive amenities, all with a lower cost of conducting business and cost of living as compared to urban areas. Not to mention, cities like Ottawa are looking into the concept of 15-minute cities, allowing residents to gain access to daily facilities within a 15 minute trip. You will able to attend the best school in town or reach the grocery store within 15 minutes of walking or cycling.
Slower Housing Activity Expected In 2021
The pandemic has caused a slowdown in urbanization for now, but it may even continue on in 2021. If the lockdowns continue, remote workers will inevitably seek greener space and more spacious accommodation outside the city. Not to mention, open-concept, single-family homes may not be looking too good to remote workers who need dedicated workspaces for better concentration and more privacy. All this points to the fact that 2021 will continue to see a considerably slow housing market. If the pandemic ends, cities like Montreal, Ottawa, and Toronto will recover faster than Calgary, Edmonton, and Vancouver. Canada Mortgage and Housing Corporation predicts that condo prices will come down in 2021, even in high demand markets. An increasing bevy of remote workers will balk at the prospect of having to live in a work in a cramped condo for an extended period. Even though builders are incorporating a number of features to make condos more attractive to buyers, such as dedicated areas for parcel and grocery deliveries and videoconferencing rooms, Condo living may be shrugged at in favor of single family homes in 2021.
Lesser Demand for Rentals
With a drop in immigration and uptake by university students, we may see a much lesser demand for rentals in 2021. This is also evident by the drop in asking price for rentals in major hubs like Toronto. However, with a slowdown in homeownership and Canada’s plans to invite more and more new immigrants, the rental market could see the dawn again. Some people are concerned about the tenants’ ability to pay the rent in the wake of the discontinuation of government income support programs. The switch to virtual learning at post-secondary schools is also impacting the rental market negatively, and we have yet to see how the year will fare for the rental market.
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