Remote work and how it is shaping today post-pandemic.


Remote work exploded at the beginning of the pandemic and what is it like now?

The prevalence of remote work exploded at the start of the COVID-19 pandemic, but as the country continues to move toward a “ return to normal,” more and more employers have begun to institute back- to-office policies.

From a peak of 41.1 per cent of Canadian workers working remotely in April 2020 , recent data from Statistics Canada shows that a full 25 per cent of Canadian workers are working completely remotely or in a hybrid capacity .

At the same time, a real estate frenzy that peaked with record sales prices in Ontario in 2022 saw prices fall in 2023 and the spread calm down soon , partly due to Bank of Canada rate hikes.

But many real estate agents say workers who moved out of the city during the height of the pandemic are staying put and enduring longer commutes a few times a week, while others — especially those further from urban centers or in remote or hard- to-reach locations . -Places of arrival – they said the back-to-office relationship also drew clients back to the city, or that the challenges of rustic living caught up with some new homeowners.

‘Drive until they can pay

Data from the Toronto Regional Real Estate Board shows the average home price in the city of Toronto was $884,385 in January 2020. The average price increased 40 percent to $1,243,070 in April 2022 and has since fallen 22 percent to $959,915 in January 2024.

While the percentage increase in price may seem large, areas outside of Greater Toronto have seen significant increases in the average home sale price – in many cases nearly doubling in two years.

Prices rose in the Hamilton area by about 40% to just under $976,000 from 2020 to 2022, before falling about 10% from last year’s record highs , according to the Association of Realtors. Hamilton-Burlington Real Estate . Areas further away from the GTA saw sales prices nearly double.

Based on his experience, realtor Rob Golfi says there are many GTA members who simply “drive until they can afford it .”

Data from the Canadian Real Estate Association shows that the price of a home in the Guelph area rose more than 80 percent between January 2020 and February 2022, to $1.1 million, before falling about 20 percent from that price. to January’s record highs.

Data from the London St. Thomas Association of Realtors shows prices in the region rose 88 percent between January 2020 and February 2022, to $825,221. In February, the average sales price was 25% below the peak. CREA data shows similar percentage changes in home sales prices in the Kingston dimension during this period, with prices peaking at just under $750,000 in March 2022.

In Windsor and Essex County , CREA data shows the price of a home nearly doubled between January 2020 and March 2022, to just over $700,000. In February 2024, the price fell by around 17% from the peak price .

According to data from the Barrie and District Association of Realtors, the average sale price of a home in Barrie increased by about 90 percent between 2020 and 2022, to just over $1 million, before falling by about 25 percent. in relation to the historic highs of 2023.

Shannon Murree, team leader with RE/Max, Hallmark Chay Realty, said that as return-to-office policies have multiplied, so has the number of people who decided they no longer wanted to agree to the everyday commute .

“Barrie, for example, if you have to go to Toronto and you have to work at 9am… if you go a minute after 6pm or 6:30pm – that’s it, you’re done. You will remain stuck in traffic,” she said.

“I was talking to someone who a normal 45 minute journey took 2.5 hours to get there.”

‘The office market is currently devastated’

In the month after the World Health Organization declared COVID-19 a pandemic, 41.1 per cent of Canadian workers were working remotely. As of February 2024, 13.5 per cent of Canadian workers aged 15 to 69 worked exclusively from home , while 11.4 per cent had a hybrid compliant , says StatCan.

While difficult to quantify statistically, there is reason to believe that restrictions on travel and remote work helped push people to look at more rural areas in the early years of this decade .

A real estate agent stated in July 2020 that when northern Ontario reopened before Toronto, “everyone started coming here.” Jill Price of Re-Max All Stars, covering a region from the Kawarthas to Bancroft, said on the station that retirees were retiring early and moving north , while younger couples in their 30s who worked at home , they chose to set up their office at home . close to a lake.

While the percentage of remote workers is far from its April 2020 peak, the office environment appears to have changed forever.

Across Canada, the commercial real estate sector has not recovered from a massive increase in vacancy. Maria Benavente, vice president and portfolio manager focused on real estate at Dynamic Funds, says that 10 to 15 percent of demand has been “permanently destroyed”.

At a national level , the office vacancy rate in the city’s core reached a record high of 19.4% at the end of 2023, according to data from commercial real estate and investment company CBRE. For context, a “healthy” office vacancy rate would fall between 10 and 12 percent.

Courtney Elling, smart workspace lead at Cisco Canada, said “flexibility is definitely here to stay ” and results from Cisco’s Reimagining Workplace Survey show that employees and employers are almost equally divided on work preferences.

Among employers, 24 percent of respondents preferred a combination of home and office, 37 percent preferred to be primarily in the office, and 34 percent preferred to work primarily from home . Among employees, the share was 29%, 34% and 30%, respectively.

Elling said that in the last three years he has seen organizations taking advantage of not requiring as much space and perhaps getting out of a lease or selling any space.

“What they are facing (now) is data. How do I get data that tells me how the space is actually being utilized, so I can make those decisions with a little more support and quantitative data?

Realtor Marcus Plowright said return-to-office policies haven’t had much of an impact on the commercial real estate sector in the London and St. Louis area .

“The office market is currently devastated. I’ve seen an office size of 25,000 square feet reduced to 4,000,” he explained.

“Even if a company wants to bring its people back, they have to sit back and say , ‘ Very much , we want you two days or three days out of five,’ and those people can move and endure that displacement for two or three days.”

Closer to the GTA, Hamilton saw many people settle in the region from Toronto during the height of the pandemic and Golfi says that trend continues.

He also noted no major impact on return-to- mission policies , echoing Plowright’s sentiments about agreeing to a few days of deployment. He said nearly a third of homes currently sold in the Hamilton area are still from buyers in the GTA.

Guelph real estate duo Beth and Ryan Waller received calls almost daily from people in the GTA who wanted to move. Now, though, they said they’re seeing more people leaving Guelph — and not returning to the big city. They had one person move from Guelph to Listowel and another from Guelph to Edmonton.

“In fact, from our perspective, people are not even returning to the city, but are doing the opposite and going further,” said Ryan Waller.

Realtor Matt Lee said Kingston is a large retirement community, but during the height of the pandemic he was “selling homes to seniors” who were moving to remain closer to their children and grandchildren, “which generally meant They were heading back to town.”

At the same time, he said, those working remotely were moving to places where they could “ get out of the city and have a little more space.”

Both changes appear to be reversing, Lee said, with retirees starting to return and fewer out-of-town remote workers shopping in Kingston.

‘Not everyone is ready for this’

Areas that saw average home sales prices nearly double between 2020 and 2022 have since seen declines , typically a drop of around 20 percent from historic highs. However, the experience has been a little more volatile for rural and northern households .

In Peterborough and the Kawarthas, for example, the 2023 Re/Max Cottage Trends report showed that during the first quarter of 2023, the average sale price of cottages in the region fell 31 percent compared to the same period in 2022 – from $1,243,442 to $855,858.

Terry Rees, outgoing executive director of the Federation of Ontario Couples Associations, which represents more than 500 lake and cottage associations in Ontario, said rural and northern Ontario had been going through “an exodus for 40 years.” before people began to return to rural areas and further north . areas in the last ten as real estate values ​​began to rise .

People were already looking for more affordable places to live “and perhaps a lifestyle change” when the pandemic hit and “accelerated that extremely,” he said. First of all , however, what used to be “hot everywhere” is now exclusively hot in your pockets.

“Anywhere that’s within two hours of major cities, obviously Toronto and Ottawa or London, (those markets) always tend to be high,” he explained.

“It’s also the housing crisis in general that, you know, we talk about people having to navigate until they qualify. People have already made a kind of exodus to the city core , to the nearby suburbs, and then to the outer suburbs, and soon it’s just another leap to get to places where you can still move .”

But Rees says cottage living is not for everyone, particularly in areas where many homes have their own wastewater system, a private well or rain system , and challenging weather and arrival conditions .

“There are all the things that are the magic of rustic and beach living , but that also make it a unique place that not everyone is suited to.”

In the Barrie dimension , Murree also saw some difficulties with the truth of living further away from the infrastructure, amenities and conveniences that Toronto offers.

“I’m not saying that’s a bad thing, but if you’ve always been in the city and you’re always here exclusively for the recreational aspect and you’re used to things a certain way, those are definitely considerations that you need to have.”

However, anyone expecting prices to continue to collapse may remain in shock, as a recent report from Royal LePage states that the recreational real estate market may be on track for a recovery, with the national average price forecast of housing increase by around five percent.

Low inventories with high demand could trigger a spike in prices, the report notes, with Ontario likely to see the biggest nationwide jump , at 8%.

– with files from Greg Davis, Matthew Bingley, Sean Previl and Craig Lord of Global News.

Source: globalnews