The way out of cities and city nuclei seemed an ideal solution during the pandemic. So far it was not.
Companies are increasingly required
More time in offices in the city center
Buyers who fled are now faced with a difficult decision to return to the city – the one that may be as spontaneous and expensive as their departure.
In the midst of a pandemic,
Throughout the largest city in Canada, with the Council for Regional Real Estate in Toronto
Message about the high average sale price for all the time
Of the 1,193,771 US dollars for 2022. Just three years before the pandemic, the average sales price for 2019 amounted to $ 812,996.
Prices rose by almost 50 percent in a very short period as consumers, enjoying flexibility
To which they were limited, advanced further and further from the nuclei in the tendency observed throughout the country.
These were centuries -old debates in the suburbs against the city, with a turn: you exchanged a larger house for life further from the core, but you no longer need to go to work.
Now it is changing for many. The Ontario government ordered its employees to return to work for a full time, along with many municipalities. Companies for financial services also announce that they will accept a constant presence in the office.
Go to the online -dissectioning board of the public service of Ontario, and you can feel panic. Some people transferred their lives away from the city and a trip to their face for two hours or more, in each direction.
Now what? For starters, do not panic. This is the worst that you can do in any financial situation. Emotional solutions are bad solutions.
Problem with
The fact that transaction costs can easily be up to 10 percent of your asset, as soon as you take into account the realtors, fees, legal expenses, land taxes, moving trucks and a long list of soft costs.
Jason Mercer, the main analyst in the Trreb market, said that the tendency to go to the suburb or even more distant Exurbs began before the pandemic.
“Outside (Big Toronto), Mercer said. “Some of them are simply associated with increasing housing prices very much.”
But the flexibility of the one where one physically worked played a role in promoting this trend.
Now that this flexibility is reduced, there are early indications, although the modest growth of transactions in the Toronto area.
“It is difficult to understand whether this is an improvement in accessibility, but there are people who want to change their situation (and) life regarding work,” Mercer said.
Crossing K.
Julian Schonfeldt, investment director in a Canadian apartment, said that this trend was clear during the Covid-19 pandemic: people moved to secondary markets.
“It is quite reasonable to expect that the mandates for a return to the office will see the opposite origin and bring … the demand for rent to city markets,” said Schonfeldt, whose investment real estate fund is the largest public tenant in Canada.
According to him, the impact on prices and the vacancy remains unclear, because due to the construction of apartments remains unclear, because a significant amount of offer is added.
Schonfeldt noted that liquidity in the housing market is weak, so anyone who looks at the move will face some hard choice if they want to sell.
A temporary decision to rent in city nuclei is possible, but it will not be cheap. In the nucleus of Toronto, a new unit can be $ 4 per square foot per month to rent.
Micro condo apartment with an area of 400 square feet can cost $ 20,000 a year, but at least you can stop the sale of your home until the image of the labor market is brightened up. Or you can find a more flexible work option to save this house and avoid hell of a suburban suburbs.
Phil Ruver, the Executive Director of Royal Lepage, one of the largest brokerage firms in the country, said that he knows people who moved more than 100 kilometers from Toronto, and today they are faced with difficult decisions.
“They are all now in
– he said, adding that people have to make adjustments to housing on the fly. – One person, I know, remains with his daughter two days a week. One goes, and this is bad traffic. All of them went out (in vast suburbs) during the pandemic, and then the world changed. ”
Oppmenting said that there was also a trend in which people went into their recreational properties, up to two hours, full -time. “Now they find unbearable trips,” he said. “The completely dead Toronto
Not completely dead, especially if you have a parking place. ”
The only increase may be that the prices for the apartment have fallen sharply, so if you decided to buy a Pied-Terre in the city, it will be a discount on where we were two years ago.
Dzhakomo Ladas, Deputy Director of Rentals.ca, said that the growth of secondary markets helped to smooth out the rent in the metro nuclei.
“Demand really decreased in large cities, and we will see that it increased after a few hours,” Ladas said.
Today, his groups show that the total demand determined by the tenants on his site has decreased by about eight percent compared to a year ago. People just don't want to move so much.
“This is a question of what will happen next,” said Ladas. “We have seen an increase in demand for apartments with one bedroom, but it’s too early to talk too early.”
Mercer from Trreb said that consumers will have to analyze costs and benefits and study their home budget. “People should look at the cost of movement compared to economic and social costs for a trip to work if they lose flexibility,” he said.
With such a large number of moving parts and future work, it is unclear, the main economic decision should be made, which further undermines your capital, such as selling and buying, follows with particular caution.
Assessment of an alternative temporary housing solution, an elusive goal, can be a priority for many in the coming months.
