How COVID has hastened the trend towards homebuyers moving out of major centres

Over the course of the past year, we have all heard a lot about the housing market – the lows, highs and the incredible rate of change and adaptation across the real estate industry. There have been a lot of projections and predictions on where the new home market is headed in the context of the pandemic and life in a post-pandemic world.

This will not be another one of those articles.

One interesting insight, and ever-strengthening trend, is the increasing number of homebuyers looking to relocate further away from major centres (and from their places of employment) in order to maximize their homebuying dollar, while at the same time enjoying more space.

The 18-hour city

Enter the 18-hour city.

The concept is not new. Urban planners, placemakers and the real estate community at large have talked about this for the past decade, and COVID-19 has accelerated and amplified it. Very loosely defined, the 18-hour city is a term describing mid-sized cities that feature amenities and services similar to their neighbouring large cities, an attractive lower cost of living, employment growth paired with increasing investments in municipal infrastructure and transportation such as public transit.

Compared to large metropolitan areas, housing prices are more moderate and demand is only starting to grow. Some examples of these cities include Hamilton, Barrie, and Oshawa, as they are within an hour’s drive or public transit trip from Toronto. All these areas have seen year-over-year home price appreciation in excess of 30 per cent.

We know the desire for homeownership within the Millennial cohort is strong, and many have pursued these locations to realize the homebuying aspiration, while still continuing to develop their careers. Remote work options and expanded regional GO transit options have made the latter a reality that wasn’t possible even just five years ago.

In similar fashion, employers are drawn to these smaller centres as a source of a high-skilled employee base, along with lower costs of conducting business. Put these elements together and we have the ingredients for the rise of the 18-hour city.

Market implications

So, what does this mean for homebuyers and builders? It means their new communities in these 18-hour cities will start to incorporate design elements that cater to these new cohorts of people making the shift from the big city.

Open-concept plans are being updated to offer more private space for buyers, such as the creation of more dens or finished basements. It’s about giving the flexibility to allow every member of a household to have their own space to conduct online learning or Zoom meetings in peace.

So, what does all this mean for the condo market? Make no mistake, there will always be a strong market for highrise living in the GTA. Condominium developers are starting to design and include more COVID-specific amenities that cater to the needs of buyers who have shifted to work-from-home. As well, bookable treatment or workout rooms allow residents to be active indoors while guaranteeing they can do so safely. The shared outdoor amenity space is also changing. Separated sitting booths and semi-private barbecues and firepits are becoming more attractive ways to share outdoor space.

What happens to the 18-hour dwellers when the call comes from employers asking them to report back to the office? This is a time for city planners, developers, policy makers, employers and citizens at large to have a conversation surrounding necessity and opportunity. The demand for urban living is not over – people’s interest in the richness and energy of life in the city will return in every capacity. However, the interest in 18-hour cities is also likely here to stay. These two lifestyle options can, and will, co-exist in the future.