Written by Bōde CEO & Founder, Robert Price
For Canadians, COVID-19 instantly and radically changed many aspects of our personal and professional lives. We have dealt with waves of opaque regulation changes, uncertainty, and living in a constant state of flux. These momentous waves have significantly impacted the real estate market in Canada.
Many home buyers who have historically valued professional and social proximity to others, have abandoned those preferences completely. Commuting length has long been a significant driver of location value. Now, with many employers electing for permanent work from home options – commute length is of far less significance. Proximity to friends and entertainment has shifted to a preference for larger homes and more space.
Property Type
Since the beginning of the pandemic, Canada has experienced a shift in housing preferences toward single-family homes as home buyers seek larger properties and more space. From April 2020 to February 2021, the Bank of Canada has seen a dramatic 26% pricing change between condominiums and single-family homes. Previously mirroring each other, the start of the pandemic created an exponential separation of demand and in turn price with single-family homes increasing by 22% and condos dropping by 4%.
Sources: Canadian Real Estate Association and Bank of Canada calculations
Growth in Distance from City Centres
A recent poll by market research company Cashew, revealed that 56% of Canadians want more living space, larger homes, or more outdoor space which in many cases means moving away from the downtown core. The following graph illustrates some of Canada’s largest markets with Edmonton and Calgary exhibiting similar dynamics:
A Changing Workforce
According to Statistics Canada 32% of Canadian employees in 2021 aged 15-69 work from home vs. only 4% in 2016. This marked change was largely driven by government regulations due to COVID. HR services company Randstad recently released a report sharing that 81.5% of Canadians are happy with their current remote work setup, with 33% wanting to remain fully remote post-pandemic, and 95% wanting to work from home at least one day per week.
Calgary Version
Calgary has a significant delta in terms of supply of Apartment and Detached homes on trend with the rest of Canadian market data. As illustrated below apartment inventory is up 1% while Calgary detached inventory is down 39% vs. the average of the previous 3 years:
This represents a significant opportunity for those with detached properties to sell into a market with very little supply (producing the opportunity for a higher price than the average of the last 4 years) while buying a smaller apartment with comparatively significantly more supply. Put simply, sell high, buy low.
Edmonton Version
Edmonton has a significant delta in terms of supply of Apartment and Detached homes on trend with the rest of Canadian market data. As illustrated below apartment inventory is up 14% while detached inventory is only up 1% vs. the average of the previous 3 years:
This represents a significant opportunity for those with detached properties to sell into a market with very little supply (producing the opportunity for a higher price than the average of the last 4 years) while buying a smaller apartment with comparatively significantly more supply. Put simply, sell high, buy low.
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