What makes a better choice of home when you’re an empty nester: a condo or a bungalow? It depends on what you’re looking for and what you want your life to look like. That said, the trends from the last few months show that what people are looking for has changed dramatically in a short period of time.
In 2019, the average price of condos in Toronto grew by 10 percent according to TREB (Toronto Real Estate Board), following on the heels of years of steady growth. There were a lot of reasons for the quick price growth. Condos appealed to a broad range of people: first-time homebuyers who had been priced out of townhouses and freehold homes, retirees who wanted to downsize in the city, real estate investors, and short-term rental operators.
Since COVID-19 caused a lockdown across Ontario (and much of the world) back in mid-March, all that changed. Condo prices in Toronto have slumped by 10 percent across the city, erasing all of 2019’s gains and trimming an average of $65,000 off their value in a matter of months. The steep decrease is likely due to several factors:
- The collapse of the tourism industry has gutted short rental operators who are now scrambling to find an alternative income stream through less-profitable long-term renters or offloading their investments altogether.
- Buyers’ preferences are shifting back toward larger spaces and single-family homes.
New Routines Mean New Expectations
The pandemic has changed routines, and with that come new expectations for homebuyers. The biggest change has been the widespread switch to work-from-home. As more companies announce their plans to continue work-from-home in the future, and workers expect that they will be able to enjoy more time away from the office, suddenly homebuyers are looking further afield to find more space.
There has been a huge increase in buyers looking in cottage country to the north of Toronto, as well as further south in the Niagara Region. Now that the commute may be a thing of the past – or at least only necessary a couple of times a week – new homes in Niagara on the Lake are appealing to a wider range of people.
A lot of shine has also come off of the urban lifestyle. The close proximity to restaurants, music venues, and big events has become a lot less appealing. Even though things are reopening, many people who were reluctant to think about leaving the city have discovered that they don’t mind a quieter, more productive home life. All of that is possible with more room to stretch out.
Find a Better Investment in the Country
For homebuyers who have been in the market for a while already and are looking for a long-term property, bungalows are great investments. They’re ideal for people who want to stay where they are as they get older and don’t want to have to worry about stairs in their senior years.
Until very recently, it looked like the real estate market was headed into a golden age for condos. High-rise condo towers were going up in cities around the world, and Toronto was at the head of the pack. As of April 2020, Toronto still had more cranes than any other city skyline in North America, most of them put to use for building high-rise condos.
But the availability of condo rentals has gone up over 250% in Toronto as the tourism industry has collapsed. Changing tastes from buyers also means the demand pressure keeping up condo prices is suddenly vanishing. Rural and suburban detached homes and townhomes have proven to be more resilient in price, which is worth noting for investors.
It’s important to decide which home is right for you, not just for your portfolio. Ask yourself what kind of lifestyle you want to be living tomorrow and ten years from now. Do you still see yourself attached to the city, or do you see yourself enjoying more space with a big backyard? Do you imagine living in a place where you know your neighbours, or do you prefer the anonymity of high-rise living?
Also, keep in mind your future needs. A bungalow is a lot more adaptable than a high-rise condo. You’ll have more leeway for making senior-friendly conversions as you get older. Meanwhile, with high-rises there are a lot of maintenance issues that can go wrong that you won’t have any control over. One of the big problems many buildings face is elevators. Buildings across Toronto frequently experience service outages and elevator entrapments, partly due to a shortage of elevator technicians across the province.
Why Torontonians Are Leaving for Niagara
There are a lot of factors behind Torontonians leaving the city for homes further afield. It was a trend the market was seeing long before the lockdown and work-from-home changes made homes farther away from the city more appealing, but now the “new normal” is helping facilitate the big move as well.
But it’s not just push factors like high prices in the city that are causing people to leave. Places like Niagara offer a lifestyle many want to enjoy. Niagara has some incredible scenic natural features, a great outdoor lifestyle, and it’s surrounded by vineyards. Check out these 5 reasons to build your dream home in Niagara to find out what makes the region such as a special place, and why so many people are moving here.
More space is a great investment right now. On the one hand, the increased adoption of work-from-home policies means commuting is less of a concern, the demands of two people working full-time from their house put a strain on small spaces. Meanwhile, people are finding that they want to spend more time in their own space rather than out and about, and they want to make sure there’s plenty of it. If you’re beginning the search for a new home and thinking about leaving the city, check out our custom homes in Niagara.