Saturday, August 29, 2020 / by Sergey Korostensky
A month ago in this space, I had some questions about how the virus will affect home-buying habits.
Some questions were …
Will buying a condo/apartment in a 30- or 35-storey high-rise, with 300 apartments and two elevators fall out of favour, even with those seeking a hip, trendy, urban lifestyle?
Will people already living in towers such as this put their apartments up for sale to get away from high densities and packed elevators?
With many people working from home and, with signs many will not return to a normal work environment, will those who bought homes close to their places of work to reduce commuting times sell those homes, opting for living in the suburbs or smaller, less-dense towns orbiting Calgary? Will first-time buyers also choose a small-town or suburban lifestyle as they contemplate starting and raising a family?
Smaller centres such as Crossfield or Carstairs or Strathmore or High River are where home prices are lower, life is slower and schools are less crowded.
Or will they move to towns and low-traffic rural-estate areas where homes are more expensive, but where specific lifestyle choices are available, such as Canmore?
Much of my speculation was based on information I was getting from reports coming from the United States, where evidence is mounting that buyers have shifted their focus away from dense urban areas in favour of rural areas.
“We have seen that people are more interested in that house at the foot of the mountains by the lake,” Glenn Kelman, CEO of online real estate portal Redfin, told CNBC, unintentionally identifying the Canmore area. “Rural demand is much stronger right now than urban demand, and that’s a flip from where it’s been for the longest time, where everybody wanted to live in the city. We’ll see how it comes back, but there seems to be a profound, psychological change among consumers who are looking for houses.”
Joel Kotkin, executive director for the Urban Reform Institute in the U.S., writing for New Geography, also sees it.
“The COVID-19 pandemic will be shaping how we live, work and learn about the world, including the dispersion of population out of the nation’s densest urban areas and the long-standing trend away from mass transit and office concentration towards flatter and often home-based employment,” said Kotkin. “Amid years of fanfare about how big, dense cities are the future, the country has kept spreading out with nearly all population growth since 2010 occurring in the urban periphery and smaller cities.
“As a new study from Heartland Forward demonstrates, both immigrants and millennials — the key groups behind urban growth — are increasingly moving to interior cities and even small towns.”
Now, a new study from Re/Max finds there is a similar shift in Canada.
The study is based on a survey of Re/Max brokers and agents across Canada conducted by Leger on behalf of Re/Max.
The study says the pandemic has prompted many Canadians to reassess their living situations, with the survey of agents finding 32 percent of Canadians no longer want to live in large urban centres and instead would opt for rural or suburban communities. This trend is stronger among Canadians under the age of 55 than those in the 55-plus age group.
The vast majority of home buyers in Canada are in the under 55 age group.
“Many home buyers are now exploring different neighbourhoods that better suit their new lifestyles and real estate agents are getting busier and working more with buyers from different major cities,” says Elton Ash, regional executive vice-president, Re/Max of Western Canada. “In lockstep with the Leger survey revealing increased consumer interest in relocating to rural areas, as well as 48 percent of Canadians wanting to live closer to green space, Re/Max brokers and agents have reported that many buyers in Toronto and Vancouver, who are now working remotely, have expressed interest in regions such as Muskoka and Peterborough and the Kawarthas, and Whistler, in search of more space and access to nature.
“Not only are Canadians more motivated to leave cities, but changes in work and life dynamics have also shifted their needs and wants for their homes. According to the survey, 44 percent of Canadians would like a home with more space for personal amenities, such as a pool, balcony or a large yard.”
The survey of agents also found they are confident the fall housing market will look much like spring-like market activity, says Ash.
“While COVID-19 lockdowns slowed Canada’s housing market at the start of a typically busy spring market, activity bounced back by early summer in many regions,” he says. “Despite the tragic impacts of the pandemic, our optimism in the strength of Canada’s housing market has always remained, and current market activity further exemplifies this.”
Re/Max expects the Calgary market to remain relatively stable going into the fall.
“Market activity picked up in June and July,” says Ash. “Home prices are expected to remain steady throughout summer and into the fall. Since June, first-time home buyers in the region have been more active as there are no advantages in waiting for prices to fall.
“Higher-end properties in Calgary are beginning to sell faster due to falling prices, and acreages in small towns are beginning to see more interest from local buyers. A three percent increase is expected in Calgary for the remainder of the year.”