Trend of Trading City Living for Suburban Space Unlikely to Last
Friday Feb 05th, 2021
The tale certainly isn’t as old as time, but it’s one you’re surely familiar with by now: COVID-19 put Canada’s housing market on pause last spring, but only for a hot second.
Since its brief interruption, the market has been moving full-speed ahead, with soaring prices, activity booming, and even indications of somewhat swift recovery where the downtown condo market is concerned.
But of all the intriguing factors surrounding this past year’s real estate fluctuations, the desire many have shown to get out of typically-coveted urban centres and into quieter, more suburban regions is easily one of the most captivating.
And according to a new economics report from CIBC, the trend is one that — albeit sounding like it makes sense — is unlikely to stick.
The report exposes that the “secret” behind the real estate market’s ongoing success (despite an upheaval of most aspects of regular life over the last year) has been “the asymmetrical nature of the recession.” While the pandemic has, of course, had severe impacts across the board, CIBC says that many Canadian households have remained financially unharmed.
This phenomenon has meant those households which have remained comfortable economically have been able to “pass stress tests with flying colours” while taking advantage of interest rates which — also in the last year — have been sitting at historically low levels. Combined with increasing desires for more space — condo living during COVID simply hasn’t been cutting it, the data shows — this occurrence has resulted in an uptick in interest for homes outside the city.
The bottom line is that Covid seems to have accelerated some trends that were occurring prior to the pandemic. But the pendulum might have now swung too far. The discount for moving away from cities has narrowed, some of it under false pretenses regarding expectations about the future. Should Covid fade into the background, as is expected, the vibrancy of cities will return and so will the demand for housing within them.