Is there a mass exodus from Toronto in our future?
COVID-19 and this current health crisis has forced many of us to reconsider where and how we should be living, and where and how we should be working. The 400-sq.-ft. downtown condominium unit was perfect for your short walk to work, your access to nearby restaurants and nightclubs, and your short subway ride to your bestie’s house. Now, you’re working from home in a cramped space, your favourite restobar is shut down and you’re afraid to take public transit.
Where is the best place to live in the era of contagious viruses?
Every Torontonian has a slightly different version of this pandemic reconsideration story, with questions such as: Do I want to raise my kids downtown? Do I want to be crammed closely into elevators, streetcars, cubicles or tiny boutique fitness centres? Will a suburban lifestyle keep me and my family safer? Or, will a move to a much smaller municipality outside the GTA be better for our general well-being and health?
We have witnessed a massive shift over the last 20 years, with the complete revitalization of downtown Toronto, the building of new office buildings and especially new highrise condominiums. The city’s population has soared in recent years. Many buyers have chosen to live in downtown condos for lifestyle and environmental reasons, to be walking distance to cafes, shops, parks, friends, hospitals and employment – all while reducing the need for development on the outskirts of the GTA that eats up greenfield lands and increases the reliance on personal automobiles for transport. They don’t want to pay for a parking spot, a car lease, license fees or insurance for a vehicle that sits in a garage most of the day and pumps out pollution the rest of the time.
A second group of people are living in downtown condominiums and rental apartments for affordability reasons, while they would much prefer to live in a single-family detached home in an inner-suburban community with a big backyard and two parking spaces. However, that requires many years to save for, and based on recent trends, that number of years is rapidly increasing. They need to be as close to work as possible to save time and money, and centrally-located highrise buildings fit the need in the short term.
Because of COVID-19, some experts are predicting a mass exodus out of Toronto, as people flee for less expensive housing and more rural and isolated locations to escape this deadly virus. If you’re thinking about buying in Toronto, how worried should you be about prices falling due to a major decline in demand as residents pack up and leave?
We will certainly see some of the older residents in the lifestyle group sell their suites and move to the smaller quaint and walkable downtown areas in places such as Peterborough, Brighton, Cobourg, St. Catharines and Niagara-on-the- Lake. However, expect most to stay due to proximity to family and friends, and the unwillingness to start over in a new place, finding doctors and dentists – and even finding the best pizza slice.
The second group, the ones living in Toronto for affordability reasons only, have less ability to move. If you can afford only a $600,000 condo, you have to travel pretty far to get a single-family house for that price, and you better be a handy person for all the work you’ll have to do on it. Secondly, the work-from-home situation isn’t likely to be permanent for most employers, so we hope you like sitting in traffic.
Anyway you slice it, the predicted demise of Toronto is premature. It is one of the most desirable cities in the world to live in. When the borders reopen, expect there to be a backlog of people looking to come here, especially with the social and political unrest south of the border, not to mention the unruly spread of COVID-19.
Don’t be a short-term speculator. Buy for the long term, add value to the property you buy via design, renovations and additions – but stay within your budget. The grass isn’t always greener on the other side, and people’s love of Toronto will ultimately trump their fear of the virus. Good luck.
Ben Myers is President of Bullpen Consulting, a boutique residential real estate advisory firm specializing in condominium and rental apartment market studies, forecasts and valuations for developers, lenders and land owners. bullpenconsulting.ca Twitter@benmyers29