Suburbs becoming cool again
May 8, 2019
A desire for affordable homes—especially detached houses for new families—is making suburban living increasing popular among young Canadian homebuyers.
While the trend is being seen across North America, the key characteristic that drives it is perhaps most apparent in Metro Vancouver where benchmark house prices in suburban Fraser Valley are $900,000—$1.2 million less expensive than detached houses in the city of Vancouver.
According to a national spring homebuyer survey from TD Bank, 66 per cent of Millennials (those aged 18 to 34) who want to buy a home would choose the suburbs over city living. Four years ago, the same survey found that 38 per cent of Millennials preferred to live in the city—either as tenants or owners—compared to 33 per cent today.
“We’re now seeing millennials looking beyond the city for housing, particularly as they start thinking about their needs for the future, like having more space to raise a family,” said Pat Giles, vice-president, mortgage lending at TD. “As a result, many are choosing the suburbs, a shift from just a few years ago when city living was this generation’s preference.”
The number one driver of this shifting trend is affordability—64 per cent of respondents cite high home prices as the reason for house hunting beyond the city limits. Other factors include increased outdoor space and larger living areas.
A similar mini-exodus to the suburbs is being seen in the United States, according to separate reports.
The trend appears to be strengthening and it represents both good and bad news for the home building industry. It is encouraging for builders of traditional detached houses in suburban communities, but it could post a caution for condo developers who had banked on continued demand from Millennials for inner-city living.