Leaving city centres is nothing new - heavyweight locations like Toronto and Vancouver with astronomical housing prices were already naturally leading Canadians to flee to the suburbs - but the COVID-19 pandemic, and the changes it has wrought, has accelerated this urban-to-suburban trend.
“It’s both a dynamic and precedent-setting time, and we’re keeping our eyes on everything at the moment,” said Lisa Abbatangelo, vice president of mortgage operations at Community Trust. “This environment is new for all of us in so many ways.”
Buyers have historically moved out of the city for many reasons - such as affordability decisions, lifestyle changes or because they’re upsizing or downsizing. The trend over the last couple of years has been towards younger Canadians making the move, but that demographic has changed significantly. More and more Canadians are making the move whether they are just starting out, in mid-career or looking at retirement and the work from home movement - also a trend accelerated by the pandemic - offers far more options for people, their lifestyles and their families. People no longer have to live on a subway line or a GO train line to have great work options, Abbatangelo noted.
“When location isn’t a factor, homebuyers can look beyond the city for more affordable properties and lifestyles. Remote work opens up a whole new world to Canadians when it comes to where they want to live versus where they have to live.”
With a vaccine a tangible reality, many look forward to getting back to some version of normal - whatever that new normal is going to look like - but Abbatangelo said working remotely is one pandemic change that’s here to stay. As beneficial as the trend has been for Canadians in showing them their work and life options in a new light, businesses are also seeing it as an opportunity to reduce overheads and are embracing different ways they can thrive in an environment where they don’t need brick and mortar walls. Abbatangelo predicts a lot of wait and see even as the vaccine rolls out, as it won’t be an overnight switch and “the new normal is still being written.”
City centres are a bit quieter than usual lately, but they’ll rebound, Abbatangelo said. Something else Community Trust is watching closely is housing prices. Spikes in demand always lead to overheated markets, and hordes of buyers seeking homes in more distant locations will definitely drive prices up in those areas, but housing prices will “continue to climb fundamentally because we’re still in the low interest rate, huge demand for property, supply shortages” environment and “no one thing in any of those is a magic wand when it comes to prices.”
“It’s important we keep our eye on those trends and keep up with them - but also continue to stay level-headed and stick to foundational, sound valuation methods when we’re looking at risk,” Abbatangelo said. “As a lender, we’ve got to keep our eye on all the different variables that can affect price and ultimately how that affects the Canadians we are here to help.”
Buyers will move into the city and buyers will move out of the city. It’s the circle of life, Abbatangelo noted, and, on top of that, with more and more people working from home and more and more businesses adapting, it’s evolution and progress. And Community Trust is evolving right alongside its customers and the marketplace.
“With our recent expansion to all of Ontario, whether our borrowers want to stay in the city or move out of the city we’re in a very good position to be able to help them with their home ownership goals.”