Homebuyer dilemma: Urbs or the burbs?
There are many factors to weigh when deciding upon suburban or downtown living
“. . . More and more families are living in condos because they are putting more value on time and don’t want to be stressed out after a long commute home . . .” JEANHY SHIM HOUSING LAB TORONTO PRESIDENT
For homebuyers looking to jump onto Toronto’s pricey property ladder, deciding between white picket fences or downtown convenience is all about trade-offs.
The age-old suburb-versus-downtown dilemma involves weighing key factors — final sale price, commute times, access to amenities, space — and making a decision that fits your lifestyle.
That’s according to Jeanhy Shim, president of Housing Lab Toronto, an independent housing research company.
“With a budget of $400,000, you can find a place to live anywhere in the GTA, it just depends how small you are willing to go,” she says.
“You can find something bigger in Etobicoke or Mississauga, but if you work in Toronto, then you need a car and will have to pay at least $1,000 a month to service it,” Shim points out. “So, maybe you’re willing to take a place that’s smaller downtown. Those are the trade-offs people need to think about.”
There’s no question that one of the most-pertinent elements of the decision-making process is the time it takes you to get to work. Toronto’s commuting times — among the worst in North America — are driving more and more people to choose less space over the rat race.
A recent report by PricewaterhouseCoopers and the Urban Land Institute found that homeowners choosing the convenience of city life over suburbia are fuelling the real estate market.
Frank Magliocco, a partner at PricewaterhouseCoopers Canada, says among the factors behind this trend is an increased awareness of the environmental costs associated with urban sprawl, as well as the cost in time and money of lengthy commutes.
Apart from that, says Shaun Hildebrand, senior vice-president of Urbanation, what is keeping people downtown is the variety of amenities suburbs cannot offer, such as independently owned shops that count on a rotating clientele and stores that open past 6 p.m.
“We’re seeing a commendable set of civic-engagement strategies launched by chief planner Jennifer Keesmaat’s office to make Toronto a better place to live, work and play,” Hildebrand says. “Although the results of these initiatives won’t be immediately realized, it’s catalyzing conversations about what makes this city great and how it can be greater still.”
This coveted downtown lifestyle — close to work and rapid transit — simply isn’t affordable for everyone, though.
Especially for those looking to buy a house rather than a condo.
Data from real estate research firm RealNet Canada shows the gap between the price of a new house and a new condo in the GTA has soared to almost $300,000.
So maybe the issue isn’t just downtown versus the suburbs, but condo versus house, suggests Shim.
“The house versus condo gap has been growing,” she says. “A condo in the city is in the $400,000 range; for a detached new house, the average is now well over $700,000 to $800,000.”
As of last month, the average price of a detached house in Toronto is a record $1 million. As for outside Toronto? “Resale homes in the 905 area are surprisingly higher than you’d think,” says Shim. “I remember a time in Brampton when you could buy a house for $250,000, now it’s not unusual to see prices such as $700,000 to $800,000.
A report from the Pembina Institute and RBC, published in January, speaks to the dilemmas buyers face.
Location Matters features four Toronto-area homebuyers, showing that families are often priced out of preferred neighbourhoods and in- stead settle on car-dependent areas where they can afford a single-family home.
But, the study concluded that these seemingly less-expensive homes can actually cost more when commuting expenses are factored into the equation.
So, where does all that leave a potential buyer seeking the best solution at a reasonable price point?
Perhaps in the market for a compromise. Maybe if you can’t live in downtown Toronto, there’s another nearby “downtown” with the same amenities, employment, critical mass and transit.
“Even the 905 areas are realizing the benefits of, and desire for, urban living,” says Hildebrand.
“The city of Vaughan has plans for a downtown being built centring its anticipated TTC subway station and the city of Markham is facilitating the development of higher, denser buildings along Hwy. 7 to take full advantage of its bus rapid transit nearing completion.”
In the end, prospective buyers should decide based on their individual needs, Shim says.
“The younger generation puts value on different things. They don’t need a house or a yard,” she says. “Family attitudes are changing, too, more and more families are living in condos because they are putting more value on time and don’t want to be stressed out after a long commute home.
“We tend to commoditize real estate and forgot really, it’s about understanding people and finding what’s right for them.”