The article discusses the impact of the COVID-19 pandemic on the real estate market in Ontario, particularly focusing on the rise and fall of remote work, return-to-office policies, and shifting housing trends. Data from Statistics Canada shows that 25 percent of working Canadians are currently working remotely or in a hybrid setup, down from a peak of 41.1 percent in April 2020. The real estate market in Ontario experienced a frenzy with record sales prices in 2022, but prices have since fallen and growth has slowed due to rate increases from the Bank of Canada. Despite this, many workers who moved away from urban centers during the pandemic are choosing to stay put and commute a few times a week, while others are returning to the city due to the challenges of rural living.
The average price of a home in Toronto increased by 40 percent from January 2020 to April 2022 before falling by 22 percent as of January 2024. Areas outside of the Greater Toronto Area also saw significant increases in average home prices, with some areas nearly doubling in just two years. Real estate agents in these areas note that many buyers from the GTA are choosing to “drive until they can afford” a home, leading to substantial price increases in regions such as Hamilton, Guelph, London, and Kingston. However, prices have since fallen in most areas, with declines of around 10-25 percent from record highs.
The shift towards remote work and return-to-office policies have also impacted the commercial real estate market, with many office spaces remaining vacant. National downtown office vacancy rates hit a record high of 19.4 percent in 2023, indicating a significant shift in how and where people work. Employers and employees are split on their work preferences, with a mix of home and office, mostly office, and mainly home work preferences. Organizations are also grappling with the challenge of collecting data to make informed decisions about office space usage.
Real estate agents across Ontario have observed shifts in housing trends, with some buyers choosing to move further away from urban centers while others return to the city. Areas that saw significant price increases between 2020 and 2022 have experienced dips in prices since then, typically around 20 percent below record highs. Rural and northern cottages have been particularly affected, with average prices falling in some regions. The recreational real estate market is expected to see a revival, with prices likely to increase due to high demand and low inventory. Despite these shifts, factors such as access to infrastructure, amenities, and conveniences from larger cities continue to influence buyers’ decisions.
Overall, the real estate market in Ontario has been impacted by changing work patterns, return-to-office policies, and shifting housing preferences. While some areas have seen significant price increases followed by declines, others are experiencing a revival in the recreational real estate market. The long-term impact of these trends remains to be seen, as workers and buyers continue to adapt to the evolving landscape of remote work and housing options.
