Workforce dynamics are rapidly evolving. Technology has made communication more efficient and opportunities to work remotely more feasible. Many GTA residents are placing a higher value on flexible working conditions and creating a better work/life balance by living in closer proximity to their work.
This has created some shift towards a preference to live in an accessible and walkable urban area, which was a factor in the recent GTA condo boom. However, significant affordability challenges in the GTA, not only for single-family homes but also condominium apartments, and tighter mortgage rules are increasingly causing prospective home buyers to look for dwellings in the Greater Golden Horseshoe (GGH), reports Altus Group in its latest GGH market update.
Sales of new condominium apartments in Waterloo and Hamilton are improving as plans for expansions in transit progress and regional concentrations of economic activity increase. Within the next 10 years, Metrolinx is expected to spend $43 billion on transit capital expansion across the GTA and Hamilton. Metrolinx’s vision is to “link communities across the region”, which may lead to higher density development, making these regions more viable for families while still providing GTA accessibility.
The Kitchener-Waterloo region has transitioned to a more affordable housing option for GTA residents. In Q2-2018, Kitchener-Waterloo had lower average asking prices for new condominium apartments while also experiencing a significant increase in new condominium apartment sales, in comparison with other areas in the GGH.
This momentum may be due to the wave of economic growth entering the “Idea Quarter” area, at least in part. Companies in the GGH are now successfully competing for talent against the GTA market, helping to stimulate condominium development activity neighbouring these technology hubs. This shift is predominantly driven by start-ups and technology companies. Many tech companies are operating out of the Waterloo Tech Campus, for example. This has resulted in interest in new condominium units being sold as investment properties, specifically to be rented out to young professionals employed at the hub.
A similar increase in activity and investment in Kitchener’s innovation hub took place following major tenants like Google expanding their presence, leasing 185,000 square feet of office space. At more than 50 per cent sold, the Charlie West condominium apartment development, located in downtown Kitchener, is a relatively more affordable alternative than the GTA, with two-bedroom plus den units available for around $500,000.
Altus Group expects Hamilton to become a more attractive region to settle for commuters, those who live and work in the city and especially those who are able to take advantage of flexible working arrangements or are seeking an alternative to the GTA’s high condo prices.
In Q1-2018, Hamilton experienced a spike in new condominium apartment sales, which were largely due to Television City Phase I, a 30-storey development released last May that is now 80 per cent sold. Television City Phase II was released in March 2018, with over half of its units sold by the end of Q2-2018.
More recently, the region has shown signs of a temporary cool down, in part due to the uncertainty of tariffs that may impact the region’s steel industry. However, in conjunction with Hamilton’s LRT expansion, which is key to revitalizing its downtown core and improving accessibility, growth in Hamilton’s technology sector may become another factor drawing in a younger, skilled talent pool.
Altus Group expects to see continually increasing interest in new condominium apartments in key GGH regions, due to more flexible working arrangements, a promising technology industry and the pursuit of more affordable housing options.
Altus Group also used Q2-2018 figures to compare what buyers with a budget of $500,000 could afford in various new condominium apartment markets across the GGH. In Barrie, Brantford, Cambridge, Guelph, Kitchener and St. Catharines, a buyer would be able to find two or three bedroom units over 1,000 square feet within their budget. In the Toronto market, meanwhile, buyers would be forced to settle for a one-bedroom unit, sized at around 521 square feet, for the same price.