It is no secret that the impact of commute time on the home-buying process, has become a critical consideration. The growth of urban areas and increased traffic congestion have resulted in longer commute times. As anyone living in a major city can attest, this can lead to higher stress levels, reduced productivity, and a poorer overall quality of life. This is why remote work – or at the very least hybrid corporate models – has become so important for employees as they can maintain a better work-life balance. Impact of Commute Time on Home Buying
During the 2020-2021 pandemic-era housing boom, many prospective homebuyers ditched the major urban centres and relocated to small towns, suburbs, and rural communities. They worked from home, could get spacious homes for a cheaper price, and the rush hour commute was a thing of the past.
Today, while some companies are maintaining their work-from-home policies, other businesses are forcing their employees back to the office. Do you know what this means? Long commute times.
Indeed, those who waved goodbye to the big cities, where their employers were located, and moved two hours away from the office will now have to endure long commute times by car or transit. Ouch.
If the commute was horrendous before the COVID-19 public health crisis, you should see some of the numbers nowadays, especially in certain parts of the country. We are looking at you, Toronto!
Yes, Toronto has it bad, and that is not good. According to a recent report, Toronto maintains the third-longest average commute time via public transportation in North America, ranked just behind New York and Chicago. The city’s average commute time is up to 56 minutes in 2023, up from 52 minutes in 2020.
Moreover, Toronto possesses the highest average distance a person needs to travel during a one-way commute: 12.29 kilometres.
The Greater Vancouver Area and Montreal also made it to the list of 99 other cities.
Now, what type of impact does this have on home-buying decisions in the Canadian real estate market?
The Impact of Commute Time on Home-Buying Decisions in Canada
The impact of commute time on home-buying decisions is twofold.
First, it leads to a strong preference for properties situated closer to city centres or employment hubs. Homebuyers prioritize residential properties that offer convenient access to their workplaces, schools, shopping centres, and recreational facilities. Individuals can allocate more quality time to their families, pursue personal interests, and achieve a better work-life balance by minimizing their commute time. Consequently, properties near urban centres or with excellent public transportation options experience heightened demand and increased property values.
Second, commute time influences a rising demand for homes in suburban areas. As commuting to city centres becomes increasingly arduous and time-consuming, many people opt to reside in suburban neighbourhoods that offer shorter commute times. These areas often provide a serene and family-friendly environment while still providing access to necessary amenities. Subsequently, the demand for suburban properties has surged in the last few years, escalating housing prices in these regions.
Meanwhile, households that generate a decent income but still cannot afford to live in large cities, such as Toronto and Vancouver, feel forced to move to rural communities where home prices are more affordable. As a result, they have no other choice but to endure the long commute to work every day.
Is the House Worth the Commute?
For many homeowners who acquired their residential properties in the early days of the pandemic, when prices outside major urban centres were low, and mortgage rates were at rock-bottom levels, the longer commute times might be worth it. However, as prices remain above their pre-pandemic levels and mortgage rates climb to their highest levels since the global financial crisis, the impact of commute time on home-buying decisions might play a far more critical role.
A 2021 Angus Reid survey found that one-third of Canadians want a commute of no more than 15 minutes. Nearly one-quarter (22 percent) want to work entirely from home.
“People want to eliminate the commute for work that is not purpose-driven,” Wayne Berger, chief executive officer of the Americas for flexible workspace provider International Workplace Group (IWG), told The Globe and Mail. “They want the ability to structure their days, or where they need to be each day, based on what’s required.”
“This presents an opportunity for cities and provinces and municipalities to start rethinking urbanization,” Berger added. “It will help alleviate the stress on a taxed infrastructure and an overextended public transit system.”
Are 15-minute neighbourhoods the answer to our housing woes?
Whatever the case may be, the genie is out of the bottle on what it feels like to work from exclusively out of your kitchen without the hassle of commutes, packing a lunch, or spending money on gasoline. But now that conditions are returning to normal, it might prove to be a trade-off for families: live in your own home and commute three hours a day or return to the city and live in a smaller space while commuting a few minutes.