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Pandemic spawns exodus to Toronto suburbs

By Reuters | September 3rd 2020 at 00:00:00 GMT +0300

The coronavirus pandemic is speeding up an exodus to Toronto's suburbs and beyond as white-collar workers, frustrated with the city's lack of family-friendly homes, bet they will be able to continue working from home after the crisis ends.

That exodus is putting pressure on Toronto's once red-hot condo market at a time when a near-record number of units are under construction, hinting at a potential glut in the making.

Many would-be buyers are driving out of Toronto to places like Barrie, a lakefront community north of the city, that has become a hot spot for millennials and families seeking more space for less.

"They tend to be in that tech-type industry where it is very possible to work from home," said Barrie real estate agent Peggy Hill. "Those people don't expect to be going back to the office anytime soon."

Recently, Hill has seen countless bidding wars - one with more than two dozen offers - overwhelming Barrie's available stock of family-friendly detached homes and starter townhomes.

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Average prices for detached homes in Simcoe County, where Barrie is located, rose six per cent in July from February, and the total value of sales jumped 84 per cent, according to the Toronto Regional Real Estate Board. The average condo price in the city of Toronto, meanwhile, fell 5.5 per cent, while total sales value rose 19 per cent.

The "tall and sprawl" dichotomy has long been at the heart of Toronto's housing crisis - shoebox condos in the core and suburban sprawl in the outskirts. Calls for more townhomes and family-friendly condos have long been ignored.

The latest data shows apartment starts are up 22.9 per cent this year, and those for townhomes fell 6.4 per cent. "We've definitely seen a problem... with a tall and sprawl development pattern," said Cherise Burda, executive director at Ryerson University's City Building Institute.

While many Toronto developers recognise the need for family housing, small units in tall towers have drawn strong investor demand due to better returns, said CIBC World Markets Deputy Chief Economist Benjamin Tal.

The city itself has played a role in the dearth of townhouses and other medium-density housing.

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