Residential Market Commentary - Sustaining the work from home society
Current conventional wisdom has it that the latest wave of home sales is being powered by “move over” and “move up” buyers.
These are people who are motivated by a desire for more space, largely prompted by the shift to remote work/work-from-home that has been triggered by the pandemic.
If it is sustained, it could be seen as a societal shift: urbanization evolving to suburban/ex-urbanization. But that sustainability is being called into question by at least one prominent Canadian economist.
Benjamin Tal, who has a propensity for bold statements, points out that the trend has been around for a while, and it has been accelerated by current circumstances. But he recently told BNN/Bloomberg he does not think it will last.
“I believe that this trend is unsustainable. It will probably continue over the next few months … but let’s picture our lives a year from now, 10 years from now,” Tal said. “Another factor is that, yes, your current job allows you to work full-time from home. What about your next job?”
“A huge amount of labour will go back to the office. A lot of that would be in big cities and all of a sudden you find yourself that you have to commute maybe two or three times a week,” Tal added.
Tal also points out that price acceleration in the outlying areas is much faster than urban centers. He hints that those increases could slow the exodus from cities.
“The question is: To what extent are prices in those remote places rising way too fast,” he said.