Commuting Get So Costly?
The notion of owning your own single-family detached home with a big yard & nice neighbours has historically been the path many would-be homeowner’s aspire to, however with increasing property prices in Toronto over the past 15 years, many people have had to change their ideal location to purchase that desired property!
“Drive till you qualify”
As this shift to the suburbs increased, the phrase “Drive till you qualify” began to ring true for more & more buyer’s in search of a single-family home in the Greater Toronto Area (GTA) who found themselves priced out of area’s that were historically more affordable as demand grew.
In addition to this, we have seen average commute times drastically increase especially for those people travelling in excess of 60 minute each way to get to/from work (16% increase between 2011 & 2016)
While single-family detaches homes are still the most preferred housing type among prospective buyers, many have been left wondering if it is actually more expensive to purchase in the suburbs & commute vs. buying & living closer to the city
The Canada Mortgage & Housing Corporation (CMHC) recently did a study to answer exactly this question and the results may surprise you!
Some of the highlights from their findings are:
Many GTA households migrated to municipalities that offered more affordable single-detaches homes, but also longer commutes
The cost of the longer commutes often completely offset the savings from moving to more affordable municipalities
They did find an exception to this when public transportation was used, however a further increase in commute times was noted
After looking at the Single-family detached home market in 2016, they found that homes were less expensive in 16 of the 21 GTA municipalities
In other words, house prices fell as the distance from Toronto increased
In 2016, there were approximately 2.6 million commuters in the GTA with 1.3 million of them commuting to a place of work within the City of Toronto
2/3rd’s of these commuters lived within the City while the remaining commuted from the 905-areas
The municipalities with the highest share of commuters were those that border the city
Pickering - 52.6%
Ajax - 48.4%
Markham - 46.9%
Vaughan - 40.8%
Richmond Hill - 39.1%
The most common mode of transportation used by commuters working in the City was the car with 49%, followed by public transportation at 40%
For 905 residents, 67% commuted by car while 21% took public transportation
The main reasons why people chose commuting vs. buying in the city were:
Less expensive housing
Larger property sizes
The areas with the longest one-way commute were:
At this time, an interesting change in the market occurred where areas that had longer commutes saw housing demand increase while supply stayed the same more so than places with a shorter commute!
As a result of this, the savings on housing costs from moving to the suburbs became less apparent once estimated commuting costs were factored in.
In fact, once monthly mortgage & commuting costs were combined, lower-priced markets such as Mississauga, Newmarket, Caledon, Whitchurch-Stouffville & East Gwillimbury end up costing more than or nearly as much as Toronto!
On the other hand, areas like Georgina, Oshawa & Clarington have retained a cost advantage due to the considerably lower housing costs these areas presently experience.
When compared with the suburbs, commuting costs for those living & travelling in the City of Toronto were significantly lower as a result of shorter distances being traveled along with the ability to utilize services like public transport, walking or biking.
Based on the CMHC’s findings, it appears that Toronto’s only possible way to grow in the future is by going upward’s (to the sky) vs. outwards to the increasingly pricey suburbs!
While some people may hold on to the home ownership goal of having a single-family detached property, many in Toronto & the GTA will become increasingly comfortable with condo living due to the lifestyle it provides & relative affordability it can offer.
Let me know what you think about City vs. Suburb living in the comments down below!
Rylie C aka the OneWheel Realtor