Canadian real estate prices are rising in areas outside of the big urban centres. Statistics Canada reports that growth in large urban centres has slowed during the pandemic. The desire for more space, both inside and outside the home, is rising primarily due to work from home.
The 500 square foot condo was great when you lived in a vibrant city. Now that it’s gone, talk of returning to work on a hybrid schedule (part from home- part office), many are changing their definition of home sweet home.
In recent media reports, CREA’s senior economist Shaun Cathcart characterizes the growth outside of major urban centres as ‘gangbusters.’ Cathcart says, “It used to be drive until you qualify, but now it’s drive away from the city and virus.”
But, for first-time homebuyers especially, is this a good idea? Or is it a trend that will fade and have Canadians longing to move back into a big urban centre?
Who is leading the “flee the city” movement?
Young people and new families lead the exodus, with cities like Toronto, Montreal, and Vancouver getting hit hardest. The Statistics Canada data shows a total of 87,444 people left those three cities between July 2019 and July 2020 for other parts of the same province, up from 72,686 the previous three years.
The higher cost of living
Homebuyers searching for homes should consider more than mortgage payments when they buy a home. Other costs such as gas, hydro and water can be significantly higher when moving from a small dwelling to a detached home. As well, smaller cities and towns tend to have higher property taxes than big urban centres.
For example, a property in Toronto assessed at $500,000 would have an annual property tax bill of $2,999. In contrast, a property set at the same value in Guelph would have a property tax bill of $5614. Conversely, your home insurance and car insurance will typically go down. Either way, your cost of living changes.
However, with a bigger home comes more expensive problems such as a larger roof, more windows and doors that need replacing, and a bigger lawn to mow.
No guarantee your work will be work from home
There is overwhelming evidence that Canadians want to continue to work in some hybrid model in the future. This survey conducted in the summer of 2020 on the pulse of Canadian workers by PWC finds
“Most employees want [the] flexibility to choose between their homes and the office, as needed—and the larger the organization, the greater the desire for remote work.”
While discussions around work from home are happening, there are no guarantees they bear any fruit. Your employer can insist you return to the office once it’s safe to do so. If you refuse to return, you may face termination. Discuss your move with your employer before taking the leap.
One of the reasons city dwellers are leaving the city is ‘lifestyle.’ They want to live in a community where they know their neighbours, where it safe for kids to play on the street and their dog has an area to run around leash-free.
But many are leaving a city whose vibrancy halted due to the pandemic. Once it’s over and people return to the city, will the small town seem slow-paced or lacking the food and entertainment options once desired? Or will small towns, with the new influx of younger families spawn the food and entertainment choices with the newfound desire for them?
Whatever the case, while the draw to move out of the city is strong right now, think of all the factors driving your decision. Where do you see your future self? Consider more than just this moment in time when making a long-term commitment to move away from your current home.
The bottom line
We’re all in a state of flux right now. When vaccines are available to everyone, do we just return to the life we led? Or will everything be forever changed? Weigh your options. No one can predict the future. Decide on the lifestyle you want, then make it fit your budget. Will you flee the city?