The year 2020 is coming to an end in some days. The COVID-19 pandemic has wrecked the year! And everyone is looking ahead and hoping 2021 has some better things in store. While a lot of people have faced challenges of enormous scale, no one can complain a lot about Toronto’s real estate market during the Pandemic.
How so? Houses did incredibly well, showing the confidence of reassuring nature in the economy. However, condos based in the city core and other parts of the city proper have not fared well. This made life quite challenging for investors and sellers. Yet, this opened up opportunities for buyers and renters in this segment.
What will next year have in store? No one has the Crystal Ball to determine the future; yet some certain trends are looking like they will take shape or become strong in the days to come, especially in the coming year of 2021.
A comprehensive report on Emerging Trends in Real Estate 2021 was recently published by renowned audit powerhouse Price Waterhouse Coopers (PwC). It offered some concrete insights into what experts believe is present on the horizon.
For those who have the time and are interested in checking out the report, they should because it contains useful information about the real estate markets of both Canada and the United States. Those who however wish to read something quickly can read this post as it is a bite-sized version of the report highlighting top trends coming to eh real estate market of not just Canada but also of the Greater Toronto Area (GTA).
Emerging trends coming in Toronto’s and Canada’s real estate in the coming year
Let us now discuss key trends that the real estate market of Toronto, Greater Toronto Area (GTA), and Canada are about to witness:
1. People are moving from major cities to smaller towns, suburbs, and centers
That is right, people are now leaving major cities and moving to smaller towns, suburbs, and smaller centers. How so? The COVID-19 pandemic changed the way the world works, learns, and plays. The pandemic will not last forever and will end. Employers and employees are pondering whether they should return to normal work routine or not.
People have now realized that they no longer need to live near their workplace. Hence they are looking for properties outside major cities. The move of residents from cities to suburbs, outer towns, or nearby smaller cities is rising, even after the pandemic.
Those who wish to leave Toronto city proper for outlying suburbs of the Greater Toronto Area (like the Durham Area, Pickering, Oshawa, Brampton, Ajax, Mississauga, Milton, Vaughan, Richmond Hill, or Oakland) should consult their realtors and real estate firms in this matter.
2. The desire for spacious living space with quality and flexibility
The desire for quality living spaces with flexibility and smooth flow is growing. In March 2020, the move from normal work routine to remote work happened overnight.
In a matter of just a few weeks, residents found themselves working in noisy spaces, lacked a dedicated workspace, no longer able to work easily in bedrooms or basements, and were distracted often when trying to solve complicated tasks needing focus and tranquility.
Given the fact that working from home is itself a long-term reality for many, residents need (and want) larger living space having distinct, quiet areas for study and work. Outdoor Space? Well, they want more of that too, or at least a reasonable amount.
Those who are desiring to purchase a condominium through Toronto MLS condo listings should search for units made by developers offering common workspace, video conferencing rooms, dedicated areas for delivering parcels and groceries, improvements in amenities, and tools for creating more connected communities.
With a lot of people working and learning from home, they will continue looking for ways to create individual spaces to plan, hold online meetings, and easily focus on projects needing completion.
3. 15-minute and 18-hour cities concepts are becoming mainstream
Some time ago, urban planners used terms such as 15-minute or 18-hour cities. Today, both are now becoming mainstream concepts. In case no one knew, an 18-hour city is a medium-sized city less intense than a major global city (or a 24-hour city) having a vibrant urban core offering a wide array of attractive amenities.
Kitchener-Waterloo, London, and Ottawa are three prime examples of such kind of cities in the province of Ontario. Other examples of such cities in Canada are Halifax, Quebec City, and Victoria. These cities are becoming attractive places to live in due to a higher level of personal freedom they offer when it comes to remote working.
A 15-minute city offers residents access to most daily necessities like groceries, drug stores, libraries, and schools – within a short distance covered by either a walk or a bicycle ride. This is also known as a livable neighborhood. Other than that, the Globe and Mail reported recently that around 23% of urban residents in Canada live in a 15-minute city.
While this kind of neighborhood has not become the norm yet, the idea of livable neighborhoods is growing in popularity. Ottawa has adopted this idea as part of its official urban development plans, and Toronto & Vancouver are exploring how to increase density in single-family areas as a means of curbing urban sprawl.
However, raising density in single-family areas may not be a feasible idea as per the beliefs of urban development experts.
4. Does no clear answer lie in the question of people choosing suburbs or cities in the long-term?
Will people choose suburbs or cities in the long run? The answer to this question is undecided.
Experts in the industry are divided on where their belief about people would prefer living in the next five years. Some experts believed that a lot of people would move away from major cities towards the suburbs even if urban living remained attractive.
Additional research and statistics from the Ontario Real Estate Association were cited in PwC’s report. It revealed that residents found suburbs and rural areas more appealing because of this pandemic.
Also, further findings in the report indicate that the Conference Board of Canada sees people leave large urban centers of Canada, Montreal, and Toronto in particular; over the next three years. Whereas, international migration is expected to maintain urban population growth.
Undoubtedly, immigration is a major driver of the economy and it is especially vital to the real estate market. It has gone down by a large margin due to the pandemic and the Government of Canada needs to create policies supportive of taking immigration back to higher levels.
The Government of Canada has announced its commitment to raise immigration to 400,000 per year over the next three years.
Smaller cities that are connected by transit are quite desirable and some downtown residents are expected to embrace remote work in settings having characteristics of an urban area. Suburban areas along transit lines, where the trend of transit-oriented community development is leading to mixed-use communities on a dense and diverse footing.
5. Market outlooks show a slowdown in housing activity for at least a year
The market’s outlook is showing a slowdown in housing activity for at least a year, going into the next. However, it is quite early to say if urban slowdown will become a long-term trend. If it does end up like that, people living in smaller homes may seek larger homes in the outer suburbs outside the city proper.
In single-family housing, open-concept homes might need a change because people who are working remotely from their homes need dedicated workspaces there. The report stated that as per the findings of the Canada Mortgage and Housing Corporation (CMHC), housing activity across Canada is expected to slow for next year at least.
What happens when things improve? Cities of Montreal, Ottawa and Toronto will more likely to recover faster than the cities of Calgary, Edmonton, and Vancouver. The Canada Mortgage and Housing Corporation are expecting condo prices to drop down further next year, despite a slowdown of supply in some markets.
However, living in condos needs to be reimagined because homeowners are more than likely to hesitate at living and working in a living space of 500 sq. ft.
6. Factors related to society, governance, and environment coming into focus
A growing emphasis on environmental, social, and governance (ESG) factors is spreading into Canada’s real estate market. While some people interviewed for the report did not think about ESG being a priority, some believed that addressing these factors is in the realm of good business sense.
These factors cover numerous initiatives from health and safety ratings to helping struggling tenants during the COVID-19 pandemic.
The events that took place this year will have effects into next year, impacting development, trends, and the way people want to live. It would be wise for prospective buyers to check for market updates, reports on trends, expert advice, and the like on the websites of their real estate companies. Such can help them make the best decision when it comes to buying a home.