Newly released Nanos research for the Ontario Real Estate Association (OREA) suggests home buyers are more attracted to the space and lower-density populations outside the city since COVID-19. Among those considering a home purchase in the next two years, 61% of online survey respondents agreed or somewhat agreed that COVID-19 has increased their interest in suburban or rural housing. Only 34% said they were more drawn to downtown living since the public health crisis hit. Younger people showed slightly more interest in living in the suburbs with about 63% of those 18 to 54 agreeing or somewhat agreeing, compared to about 58% of those 55 and older.

“The level of appeal when it comes to living in a downtown, high-density urban area right now is not as strong as the suburban and rural,” pollster Nik Nanos said on July 21 in an online presentation of consumer perceptions of the real estate market. The findings could suggest a disconnect between reality and perception, he said. “If people are in downtown Toronto they know that it’s OK. For people that are living in other parts of the province perhaps there’s a little more anxiety on that front,” said Nanos.

The research shows the pandemic has boosted the desire among renters to become homeowners, with 25% of respondents saying they are more interested in owning a home now than before. Only 13% of renters were less interested in buying a home as a result of COVID-19. 54% said their interest in buying hadn’t changed.

Those renting consumers are under the most “personal pressure” because they may not have the space they want to work from home, he said. “People are now looking at places where they live as places that they work and places they spend more time. This has put a significant level of pressure on renters. When we ask respondents what they want in a new space, it’s space to work, a back yard. That might explain why there’s a significant level of appeal right now for suburban properties and properties in rural areas,” said Nanos. He said other research has shown that people are looking for a simpler life with more connection to family and friends.

Realtor Melanie Piche said the pandemic has accelerated everything from technology to virtual business practices by 5 or 10 years. The same is true with real estate. People who were thinking about moving out of the city or into the city are choosing to do it sooner rather than later, accelerating their lifestyle choices. “I don’t think there is going to be a mass exodus from the city, but I think people will make faster lifestyle choices than they might have made if it wasn’t for this new way of living that we’ve all gone through,” she said.

OREA president Sean Morrison said affordability has been prompting consumers to consider housing outside the city for some time. But, he said, “This has definitely accelerated people’s plans of moving out.” Nanos surveyed 1,005 Ontario residents between June 23 and June 30. Respondents expected to be buying or selling a home within two years.

US Residents Also Looking Outside The City

U.S. home building increased in June boosted by a 17.2% jump in the construction of singe-family housing units, which accounts for the largest share of the housing market. There have been reports of rising demand for housing in suburbs and rural areas as companies allow employees to work from home during the COVID-19 pandemic. However, surging cases of the virus have caused some states to slow or stop the re-opening of their economy leaving home building at 24.3% of February levels. A new survey from the University of Michigan reported a drop in consumer sentiment that is expected to continue in the months ahead.  

Source: Toronto Star
Source: Globe and Mail