A new report says the return to downtown cores may not be materializing – and one brokerage owner thinks clients will continue looking to the suburbs
Recent weeks have seen significant developments for what Canada’s post-pandemic future might look like, with multiple provinces outlining their requirements for the country’s full reopening to continue.
For Canada’s mortgage professional community, one of the biggest questions in the midst of those changes will be whether the same levels of activity witnessed outside major cities throughout the pandemic continue, or if Canadians will flock back to urban centres with office and leisure spaces having opened their doors.
Despite some speculation that the continued easing of pandemic restrictions is likely to either slow or reverse the surge of Canadians moving out of the country’s largest cities, a new report by commercial real estate giant Avison Young has cast doubt on that notion – indicating that an anticipated mass return to city offices has so far failed to materialize.
The company’s Vitality Index, which measures the pace of a return to downtown areas in Canada and the United States, suggests that despite a steady increase in foot traffic in major cities, the “widespread return [to offices] in the fall” has not yet taken place.
While activity in the major cities has risen since the end of mass lockdowns and office closures, that index – which creates daily foot traffic estimates by industry from anonymized cell phone location data – shows that it’s still trending far before the pre-pandemic levels of 2019.
Since the end of May this year, visitor volume has increased by nearly 50% in both Montreal and Toronto, with Edmonton seeing a rise of 20.8%, Calgary witnessing a 13.5% hike, and Vancouver registering a 9.6% increase.
Still, visitor volume in those cities continues to lag dramatically below pre-pandemic levels. Compared with the beginning of March 2020, the month that saw the onset of lockdowns and stay-at-home orders, visitor volume in Toronto is down by over 85%, with levels in Montreal (72%), Vancouver (68%), Edmonton (63%) and Calgary (58%) also having plummeted.
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For Julie Tran (pictured above), founder and managing broker at the Burnaby, BC-based The West Mortgage Group, it would be no surprise to see Canadians continue to set their sights on purchasing homes away from downtown cores.
Speaking with Canadian Mortgage Professional on the topic of whether that urban exodus was likely to cool in the coming months, Tran said that the affordability and liveability of more remote options could continue to persuade many homebuyers to look outside Vancouver’s city centre – particularly those entering the market for the first time.
“For first-time homebuyers, the income’s obviously not significantly high, [for] their down payment, they don’t have a lot – they do have to venture out more to the suburbs because the price point is more affordable over there, and because they want the space,” she said.
The fact that many first-time homebuyers work in occupations that are favourable to remote working options, Tran said, was also one of the reasons that they would be in no hurry to turn their attention back towards the city and away from more suburban options.
“The first-time homebuyer’s generation is a younger generation, so [in] a lot of the jobs that they’re working at, they’re able to work from home, because it’s online marketing or IT,” she said. “They do want the space on top of being able to afford a certain amount, given the price point in the lower mainland.”
That ability to work from home is likely to be one of the most striking legacies of the pandemic. Sheila Botting, Avison Young’s president of professional services for the Americas, said that COVID-19 had accelerated a transformation that was already well underway in the workplace.
“The definition of the office was changing long before COVID happened,” she noted. “COVID essentially represented the largest change [in] management activity across the globe. Suddenly people realized that they could work anywhere, anytime, anyplace.”
Tran said that she believed work-from-home arrangements were likely to continue as a prominent factor in the workplace even as Canada continues its emergence from lockdown, with employers and their workforces alike realizing the advantages offered by the model.
“I feel that employers are now working with their employees to be able to have this work-at-home balance instead of going to the office,” she said. “That will still continue even if things start opening up, so they [homebuyers] will definitely still be purchasing more in the suburbs.”
That prevalence of remote work and digital solutions – especially popular among millennials and new entrants to the market – also has implications for how mortgage brokers conduct their business. Tran, who’s seen the highest number of first-time homebuyers in the past year since she started in the industry 14 years ago, said that it’s important to provide options that are suitable for each client.
“With older clients, I’ll definitely still do face-to-face meetings, because they do appreciate that,” she said. “The younger clients love the non-face-to-face meetings: it’s so much quicker, and there’s no travel time. Zoom and email have been a huge [part] of what all my clients have been through, and they’re very open to it.
“I’ll continue to do those appointments, but I’m very open to doing the face-to-face if they need it as well.”