2020 saw the beginning of a worldwide pandemic, and with it came the halt of regular life and the beginning of a new normal. For many Canadians, this new normal meant saying farewell to commuting to the office in favour of working-from-home. With the fall months approaching, many Canadians are still working from home, and many employers have realized it might be beneficial to continue this work-from-home trend for the foreseeable future. Due to this shift in the number of people required to be in cities and downtown areas drastically reducing, and a non-existent work commute, the popularity of the suburbs for homebuyers is on the rise.
The Residential Research
Did you know that according to recent surveys, nearly 35% of Canadians under the age of 55 would prefer to reside in the suburbs – not the city? A whopping 44% of Canadians are said to want a home with more space, a pool, backyard, and additional personal amenities. The GTA was traditionally so attractive for homebuyers due to location and proximity to the workplace. Now, this factor has become less important and has lead to many realizing the personal importance of having a backyard and private amenities. Homebuyers are choosing to invest in the Ontario suburban markets in locations like Hamilton, Oakville, Burlington, Kitchener, and even Muskoka.
What About Condominiums and Detached Housing?
The Toronto real-estate-market was one of the hottest in Canada back in 2019, before the pandemic. The condominium market showed a 10% price increase between 2018 and 2019. In June of this year, as the economy began to reopen, statistics showed the Home Price Index benchmark had increased by 8.2% compared to 2019 statistics. Detached and semi-detached houses experienced price growth at 11% and 12%.
The reduction of interest in purchasing condominiums is due to the same reasons the suburban housing market is gaining momentum. People do not find it necessary to live near their place of employment as a close commute is no longer a priority for the first time in decades. The onset of the pandemic has also caused people to prioritize living in an environment that does not promote shared spaces and shared amenities like swimming pools or elevators. While the market for condominiums is likely to suffer for the near future, the popularity of detached and semi-detached homes should continue to experience growth.
Why Buy Now?
It is difficult for economists to attempt to predict the future state of the Canadian economy, nor can we accurately, or confidently predict the future of the housing market and the impact the pandemic will have on the home-buying process going forward. Inflation may be an issue to deal with or worsening mortgage affordability. It is also important to note that current low mortgage rates in Canada are a motivating factor for homebuyers to jump into purchasing a new home in the suburbs. If you have been thinking about buying a home, now would be a great time to obtain your mortgage pre-approval.
My Tip:
We believe that during these uncertain economic times, it is extremely important to be prudent and not rush to buy despite it being a hot housing market with super-low interest rates. Making sure you love the home (for the short and long term) is crucial and that the associated costs (mortgage payments, property taxes, etc.) fit into your budget. This way, a short term increase or decrease to market value won’t have you second-guessing your decision to move to the suburbs. You’ll be confident about your move and the eventual growth of your investment. Our HW Advantage team will offer you professional advice, help you get the best rates, and ensure you make informed decisions. You can get started by filling out the form here or by calling us at 905-541-6961.