Canadian real estate markets are going to be very different after the pandemic. BMO‘s annual housing survey found first-time home buyers (FTHB) are moving to small towns. More young adults now find small-town living to be much more desirable than living in any of Canada’s big cities.
Canadian First-Time Buyers Fleeing To The Suburbs
Almost half of Canada’s first-time home buyers (FTHB) are planning to move to the suburbs. The survey found 47 percent of FTHB are looking to buy a home in the suburbs at the national level. Both B.C. and Ontario both came in at a slightly higher 53 percent of FTHB looking to buy in the ‘burbs. It’s an odd trend when younger and higher-income young adults are moving outside of the city. It’s something straight out of the 60s.
Why the flight to the suburbs? Affordability is the biggest reason cited by 44 percent of survey respondents. The size of housing was also a major concern, with 41 percent of people citing it as a reason. Nearly half of people didn’t cite a lifestyle preference. Instead, they cited an issue related to the BoC’s facilitation of higher home prices. Not great when cities see their middle class flee, but that’s a different article.
Smaller Town Living Is Becoming Much More Attractive To Young Adults
Small town living is becoming increasingly more attractive for FTHB. The survey found 35 percent of FTHB are looking at moving to either a small city or town. Buyers in this demographic cited affordability and space as the main reason. The survey results showed 47 percent for both of those reasons, respectively. There’s presumably some overlap between those looking at the suburbs and small towns.
Canada’s Big Cities Less Desirable Than Small Towns
One surprising thing is big cities are now less attractive to FTHB than small towns. Only 30 percent of survey respondents said they would consider a major Canadian city. Of those considering, only 27 percent are considering Toronto. Much less affordable Vancouver is almost half that, with only 15 percent.
The much more affordable cities of Montreal and Calgary didn’t find much love either. Both only received 11 percent, respectively. Small towns are now more attractive to young adults looking to buy a home. This is going to lead to a big shift in how cities look in the not-so-distant future.
More Space Is The Biggest Reason, But Not Always
Households are opting for a lot more space in small towns, instead of the city’s human work pods. The survey found 61 percent of home buyers want a detached home. Almost a third, 32 percent, are considering townhomes. Semi-detached homes were only a little more desirable than condos. Those came in at 28 percent and 27 percent, respectively. Townhomes being more popular than semi-detached units shows this isn’t just about space though.
Canadian real estate is going to look very different after it emerges from the pandemic. Buying a home anywhere is pricey in Canada, meaning FTHB are relatively affluent compared to their peers. When younger and more affluent adults find small towns more attractive than city living, you carve out a big demographic gap. When young and higher-income households leave, cities are left with lower-income workers left there for necessity, and older homeowners that bought when things were affordable. Not exactly a demographic mix that’s likely to attract a lot of future growth on its own.
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