By Isabella Diez
The move from the city to the suburbs has been happening for years but the pressure from the current COVID-19 pandemic has accelerated this trend. This drift has shown to be true mainly for millennials. Individuals in this age group are starting families and seeking more affordable ways of living. Toronto is known for tight living spaces and high prices, and so millennials in search of a better quality of life are choosing to move out of the city. In contrast, the boomer generation is choosing to reside in their current houses for as long as they can. It has been estimated that the housing market from Boomers will not become available within the next 20 years until 2041.
“We have underestimated the impact of millennials on housing markets and overestimated the impact of boomers,” states Diana Petramala, senior researcher with the Center for Urban Research and Land Development at Ryerson University.
Bypassing the immediate suburbs of Toronto, millennials and young families are setting their sights on communities that are even further away, such as Barrie, Innisfil, Hamilton, and Durham. Individuals making this move are placing greater value on space and affordability and so are willing to accept longer commuting hours. Having to work from home, and so being constrained to their living area for the past 6 months, the value and necessity of living space has become increasingly apparent to these individuals.
As the government implemented immediate shutdowns across the country in the spring, housing market activity, in turn, stalled as well. May to April is typically a busy season for house-buying with a high demand for housing being the market norm. Eventually, the housing market began to open up, and the usual spring demand moved steadily into the summer months.
RBC Economics explained that, “the pandemic completely disrupted normal seasonal patterns by shifting activity from the spring to summer. With pent-up demand now largely exhausted, we see activity cooling later this fall.”
The housing market is expected to slow down this fall, which is typical of this sector. Estimating the trend for the winter will be challenging. The winter season is normally the slowest time for the housing market however the difficulty in predicting housing trends is exacerbated by the uncertainty of the COVID-19 pandemic.
In March, Toronto also saw a drop in the rental market as the COVID-19 pandemic lockdown began. Many apartments which used to be for rent through Airbnb are now on the market for sale. This has begun to put a downward pressure on condo prices. The rental price for 1-2 bedroom condos has decreased six to eight percent. The condo market is flooded with a great deal of supply but has been met with a drastically lower demand. With the decreased demand for short-term rentals such as Airbnb, in addition to the many millennials seeking alternative housing in the suburbs, demand for rental units could continue to remain low for at least the rest of the year. With all of the current economic instability, it remains to be seen what the rental and housing market will be like in the new year.
Photo by Christie Kim, Unsplash