urban

Urban exodus in Ontario may be exaggerated

Cohort of space seekers not worried about interest rate tweaks
Friday, May 28, 2021

Digging new roots outside of Toronto and other large urban centres isn’t a dream for all Ontario-based residents.

Small-town life appeals to only 18 per cent of big city residents who are considering selling their home in the next year. A new survey from independent real estate brokerage, Right at Home Realty, revealed findings that might dispel overhyped ideas brewing over the past year. The online survey of 817 randomly selected adult Ontarians was conducted in April.

Urban dwellers are mostly concerned that moving away from big cities will impede career growth—that they won’t find the same work opportunities in smaller urban locales. Once COVID lifts, a hefty majority currently working from home said they are less willing to move far away if employers require them to work from an office part of the week.

“While the work from home outcome of the pandemic is undoubtedly impacting the housing market, we believe calls for a significant exodus from larger city centres and drastic shifts in the urban housing dynamic during and post pandemic are overstated,” said John Lusink, president of Right at Home Realty. “The vast majority of Ontarians have no plans to move or change city locations as a result of these new dynamics.”

Space seeker intentions

A tad more respondents are planning on sizing up house-wise, rather than downsize in the next two to three years. Overall, about 47 per cent of homeowners plan on using existing home equity to purchase their next property, with little concern over interest rate adjustments;  70 per cent confirmed a move of 1.5 per cent or less, would have no impact on their purchase decision.

Once they do make a move, space seekers desire more interior space, but also more outdoor space. Other pandemic-induced priorities are proximity to nature, more privacy, and being closer to family and friends. “The pandemic has awoken a renewed desire among many homeowners to focus on quality of life and experiences at home and what this means to them,” added Lusink. “Restrictions to so many everyday activities created by the pandemic have in particular highlighted the appeal of convenient access to green space.”

Meanwhile, only three per cent say they are moving because of the pandemic. Then there is a 69 per cent majority who say the pandemic isn’t impacting their moving plans at all. Nearly half of people working from home have considered moving during the last year, but far fewer are expected to do so in practice.

New homeowner woes

For those waiting on the sidelines to get into the housing market, 51 per cent feel they’ll never get into the game where they currently live—big city or small town. When broken down by age group the differences are significant: 74 per cent of Ontarians aged 18 to 34; 47 per cent between 35 to 54; and 37 per cent over the age of 55 are feeling left out.

Despite the incentives offered by financial institutions, economic uncertainty and housing affordability are primary concerns for those who believe home ownership is out of reach.

According to Lusink, about a quarter of respondents said the pandemic has even had a negative impact on their ability to save for a down payment, “slowing the prospect of a new home for a large contingent of the population.”

Housing type preferences

Housing demand across Ontario is expected to remain robust, including from non-homeowners and first-time buyers. While the vast majority (70 per cent) of non-homeowner respondents have no immediate plans to purchase a home, a substantial portion does.

According to the survey, 23 per cent of respondents who currently rent or live with family plan to purchase a home in the next two to three years. However, on the supply side of the equation, only 13 per cent of current homeowners in Ontario plans to sell in the next two to three years.

Demand for detached homes and condominiums is expected to remain the strongest across Ontario markets. When asked what housing type they are considering for their next home, 55 per cent who are planning to buy or sell in the next two to three years indicated a detached home as their top preference, followed by a condo (35 per cent), a townhouse (25 per cent) and semi-detached home (14 per cent). Within the GTA region, the number of respondents considering a condo jumps to 45 per cent, with 52 per cent considering a detached home.

 

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