Canadian Home Prices Grew Faster When Located Further From City Center
Monday May 17th, 2021Share
Canadian real estate markets are placing a big premium on living further from the city. Home prices generally saw larger growth further from the city, as people flee the centers for more space.
Greater Toronto real estate prices increased a lot more outside of the city. Less than one kilometer from the city center, home prices were down 1.86% compared to a year before. Once you get 30 kilometers outside of the center, double-digit growth becomes the norm. The last plot on the chart, over 64 kilometers away, was up over 19%. Looking at the trendline, the path is a lot more clear.
There were a few factors driving these trends - space, affordability, and work-from-home. As more people spend time in the house, and need home offices, people hunt down bigger properties. Since those are really pricey in the city, more people fled to find suburban detached homes.
None of this would have been possible without work-from-home. However, the suburbs are more expensive, on the bet work-from-home is a permanent change. The city is still expensive because people think work-from-home is temporary. One market is mispriced, but we won’t find out which one until the economy is well into its recovery.