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THE LURE OF THE SUBURBS

/Jason Kirby

There’s an adage that the three things that matter in real estate are location, location and location. But the pandemic has taught us that there’s some fluidity in what counts as a desirable location. After years of big cities like Toronto and Vancouver driving Canada’s real estate boom, people are now paying a premium for country—or at least suburban—living. Statistics Canada’s most recent population count, as of July 2020, revealed 50,400 more people left Toronto for other parts of Ontario than moved to the city compared to a year earlier, while Vancouver’s meagre population growth was outmatched by places in B.C. such as Chilliwack and Kelowna.

While the so-called urban exodus was already underway before the pandemic hit, as young homebuyers sought more affordable digs, the crisis kicked things into high gear. In its most recent analysis of housing market imbalances and household debt, the Bank of Canada looked at markets in scores of postal codes in and around Toronto, Vancouver, Montreal and Ottawa. It found that the farther you go from those city centres, the hotter the market.

The obvious question for both the real estate and the job markets is whether this trend will hold after the pandemic ends. A lot may depend on how accommodating employers decide to be when it comes to continuing remotework arrangements. A recent analysis by CIBC economists found many employers expect their workers to return to the office full time when this is over.

There’s also the inescapable fact that the boom in rural and smallcity real estate markets has been so dramatic, it has narrowed the premium traditionally paid to live in big cities. It’s to the point where homebuyers may have second thoughts about moving. “The pendulum might have now swung too far,” wrote CIBC economists Benjamin Tal and Royce Mendes. “Should COVID fade into the background, as is expected, the vibrancy of cities will return, and so will the demand for housing within them.”

WEALTH

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2021-05-29T07:00:00.0000000Z

2021-05-29T07:00:00.0000000Z

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