Will there be a reversal of the trend to the suburbs?

by Davelle Morrison
Last Thursday, I had the opportunity to attend the 14th Annual Post City Real Estate Roundtable – “Real Estate 2021: City vs. Suburbs” hosted by University of Toronto’s Rotman School of Management. 

The panelists included: 

  • Barry Cohen, Principal, Barry Cohen Homes Inc
  • Odeen Eccleston, Co-Host, HGTV Canada’s “Hot Market”
  • Josh Daniel Flagg, Original Cast Member, Million Dollar Listings LA
  • Brian Gluckstein, Principal, Gluckstein Design Planning
  • Tim Hudak, CEO, Ontario Real Estate Association (OREA)
  • Michael Kalles, President, Harvey Kalles
  • Jennifer Keesmaat, former Chief Planner, City of Toronto
  • Brad Lamb, Founder, Lamb Development Corp.
  • Sangita Patel, Host, HGTV Canada’s Home To Win
  • Michele Romanow, Dragon, CBC’s Dragons’ Den; Co-Founder, Clearbanc
  • William Strange, SmartCentres Professor of Real Estate and Director – Centre for Real Estate and Urban Economics, Rotman School of Management, University of Toronto
  • Benjamin Tal, Deputy Chief Economist, CIBC Capital Markets Inc.
  • Nikki Gill, Managing Editor, Post City Magazines

I have highlighted the comments of some of the panelists and the full transcript can be read in an upcoming issue of Post City Magazine.

Benjamin Tal’s commentary:

  • We are seeing a symmetrical recession in that the job loss only affects one sector; the service industry. The bulk of those in the service industry are young and are renters. As most of those who have suffered job losses were not home-owners, the housing market has not been affected.
  • There will be a shock when our taxes increase to pay for the government handouts. 
  • The plumbing of our future economy is being laid right now with universal daycare and social assistance. 
  • The word inflation has been missing over the last few years and it might come back as the Bank of Canada has been printing money.
  • There has been a correlation between distance and price when it comes to buying a home in the suburbs vs. the city. The further away the homes are from the GTA, the faster the prices have climbed. 
  • Prices in the suburbs have climbed too high, too fast.
  • When he met with the CEOs of many companies, they all mentioned that office life will come back.
  • Perhaps your current employer allows you to stay home but your next employer may not allow it.
  • There will be a reversal of the trend to the suburbs.
  • The price per square foot of the resale condo market will start to catch up to the pre-construction market.
  • Covid is either an event or a condition. Tal believes it to be an event, therefore, life will go back to normal. Our lack of supply and lack of affordability issues will continue.
  • The rental market will pick up and rents will rise again.
  • Immigration will return.
  • We still need more purpose-built rental buildings.
  • Governments must fix the affordability crisis. Private owners cannot fix this problem.
  • We are in a double dip recession.
  • Second half of this year should be strong as most people will get vaccinated.
  • We should have 6%-7% GDP growth.
  • The growth in the economy as a result of Covid is deep and narrow, so not everyone feels it. If they do feel the effects of Covid, it’s a deep effect like that in the service industry, which Tal feels will rebound quickly.
  • Once people are vaccinated, they will go out and spend in the 4th quarter.
  • Overall, he feels that the housing and condo markets will keep rising.

Michele Romanow also had some interesting observations:

  • Her company is now hiring people from around the world since people can work from home, as long as they are willing to work Eastern Standard Time.
  • Her office will most likely do extended retreats in 1 location to get people together a few times per year.
  • The wealthy have stopped spending on luxury goods like travel or shopping and are putting their money into investing in condos and the stock market. This explains why market movement with the Game Stop stock happened.

Professor William Strange’s comments:

  • If vaccinations go as scheduled, the economy will return.

Tim Hudak’s comments:

  • Nothing beats a place to call home.
  • Residential real estate is a great investment.
  • Let’s hope the government resists the idea to interfere with the real estate market unless it’s to create more supply.

There were lots of interesting nuggets from the roundtable discussion.

Thoughts? Questions?

Get in touch with me: 416.509.3286 or Davelle@BosleyRealEstate.com

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