“He who is not contented with what he has, would not be contented with what he would like to have.” - Socrates
The District of Squamish is only a 45-minute drive from Downtown Vancouver and is considered a small adventure town with more than $95 million in visitor spending annually. Many of the local businesses there have faced a tough year, particularly with tourism and travel being among the hardest-hit industries.
Beyond my personal desire to move closer to nature, I have been genuinely curious as to whether the so-called "urban exodus" is a reality, or mostly an ephemeral surge in interest. Small towns like Squamish are no less prone to the spread of coronavirus, but if you are fortunate enough to work remotely, it's hard to argue the appeal of having the great outdoors as your backyard. You also get more bang for your buck, with some 2-bedroom condos asking the same as a 1-bedroom in the city.
The Vancouver real estate market saw record 56% year-over-year growth in September, with single-family housing having the highest total sales in over a decade at 76% year-over-year. There is certainly validity to the great reshuffling, with historically low interest rates, FOMO, and the preference for more space and privacy as families are spending more time at home. Current market conditions are a contrast from CMHC's forecast in May which cited between a 9-18% price drop before recovery in the first half of 2021 (which Bloomberg reports they vehemently stand by despite the deepest downturn since the Great Depression). Consensus is that the unprecedented demand, however, is not sustainable.
Turning to the rental market, rentals.ca reported the average rent for all properties listed on their site dropped 9.5% from $1,954 to $1,769 year-over-year in September. Their analysis drills down to isolate the impact by unit size and property type, with smaller studio-sized units having the largest price drops and growth in listings, as tenants resort to cozying up with their parents again, increasing their savings, and taking their education virtual.
Data from Miller Samuel Inc. and Douglas Elliman Real Estate confirms this trend, as New York is experiencing the fastest falling rents for small apartments–the cheapest they have been since 2013. San Fransisco rents for similar-sized units were also down 31%, London down 8.1%, and Toronto down 14.5%.
Another study released by apartmentlist.com, identifies where these renters are migrating to. They analyzed data on millions of searches and discovered–at the onset of the pandemic–that a larger share of search traffic was conversely flowing from suburbs to cities. There was significant variation, however, depending on region and property type. The need for more affordable housing was the most common reason renters were deciding to move, and with more employers allowing remote work, the boonies doesn't sound like too bad of an idea. So while there may be a lot of speculation, predictions of a widespread urban exodus may be premature.
Renter Migration
The shift in demand in the world's major cities does not necessarily foreshadow radical de-urbanization, as the pandemic will end, a vaccine will eventually be introduced, jobs will return, and cities could potentially be reshaped in more equitable ways.
So this is 2020. Less need to commute. Work From Home. Accessory Dwelling Units. Fractional ownership. Online eduction. Naked Zoom cameos. Bank of mom and dad. Trudeau bucks. Social upheaval. The new decade accelerating us even faster into the digital age. What a world. Living closer to the aptly named Sea to Sky might just be what the doctor ordered. An internet connection, meaningful problems to solve, text editor, virtual server, family and friends, and good health, are all I really need to endure whatever life throws at us. How has this year made you think differently?
