Return to Office, Empty Towers and a Productivity Warning: Canada's September 2024 Housing News

Four stories from September 2024 matter for Canadian housing. The federal government told its employees to end working from home and come back two or three days a week. One fifth of Toronto's office space sat empty. RE/MAX forecast average prices rising 1 to 6 percent by the end of 2024 in most regions. And TD warned that Canada has a productivity crisis.

I am Moe Asgarian, a broker with RE/MAX in Toronto. Once or twice a month I go through the Canadian news that touches our housing market, directly or indirectly, and these were the items from September 2024 that I thought were worth your time.

Federal employees were ordered back to the office

The first story is the federal government requiring its employees to return to the office. What was announced in September 2024 is that public servants must work in person two or three days a week, and overall spend between 40 and 60 percent of their working time in the office.

Remember what happened after the pandemic spread. Offices and companies closed, and a lot of employees, federal staff among them, decided to leave the big cities for smaller ones so they could set up a home office in a larger house. That did a great deal for small-town Canada, and it had a particular effect on the big cities, Toronto most of all.

The decision, and the whole question of working from home or from an office, has opponents. There are reports showing that people's output is generally higher when they work from home, and as of September 2024 some of those reports put the gain as high as 22 percent. Plenty of members of the public service union were unhappy about going back as of September 2024. Their argument is that the office costs extra money, adds commuting time and upsets the balance of work and daily life, so they would rather stay home.

One fifth of Toronto's office space sat empty

Here is the number behind the policy. As of September 2024 one fifth of the office space in Toronto was empty, and the picture in Calgary and Ottawa was worse than that. Interestingly, the Ontario provincial government also asked its employees to work from the office two or three days a week around the same time.

The real concern for governments, provincial and federal alike, is that the big cities empty out and lose their economic life. Whether it can be enforced is another matter. We will see whether government can actually make this happen or whether the labour unions carry more weight and employees go on working from home.

RE/MAX saw signs of stability returning

The second story is a RE/MAX report saying the Canadian housing market was showing signs of stability. With interest rates coming down, the report described a market in recovery, and said the average home price could rise between 1 and 6 percent by the end of 2024 in most parts of Canada.

For the Greater Toronto Area specifically, the RE/MAX forecast in September 2024 was that it would remain a balanced market. The report expected price growth from a year earlier in York Region, which means Richmond Hill, Aurora and Newmarket, along with Vaughan and Markham. The City of Toronto it treated as flat, and the main reason is the one you already know: a large share of what is for sale in the city is condos, and the prices those sell at can cancel out the growth in detached houses and townhouses once everything lands in a single average price.

A survey in that same material, published in September 2024, found that 16 percent of Canadians would consider buying a condo or a house if the Bank of Canada cut rates. The report also said that as rates came down through 2024, confidence among home buyers improved, particularly in the younger generation. On the other side it noted that people who already own are under pressure and some may be forced to sell. The core problem as of September 2024 was unchanged: prices are high, mortgages are expensive, and they had not come down far enough.

TD warned Canada has a productivity crisis

The third story that caught my eye is the productivity crisis in the Canadian economy. A new TD report in September 2024 said Canada is facing one. What has happened is that investment fell in productive sectors and rose in unproductive ones, which pulls productivity down. TD's warning is that if the trend continues, living standards slip year by year and public services shrink. The report showed that productivity growth, which ran at about 1.2 percent in Canada through the 2010s, had turned negative by then.

I think that is an important story, and it has a lot to do with the decisions we make about housing. Productivity is what pays for wage growth, and wage growth is what makes a mortgage payment survivable over the long life of the loan.

One third of Canadian households were under financial strain

The fourth story is a Statistics Canada report on the financial problems of Canadian households. It found that about one third of Canadian households were facing financial difficulties as of its September 2024 publication, and that the strain was hitting both renters and owners.

This one is an important report. It comes out every two years, it is full of figures and comparisons, and it is the best way to form an accurate picture of how people are actually living. If you are deciding whether to stretch for a purchase, it is worth a look.

What these four stories mean for Toronto buyers and sellers

Here is how I read them together in October 2024. A requirement to be in the office two or three days a week does not put anyone back into a downtown condo full time, but it does put a floor under the value of being close in. The move after the pandemic spread, out of the big cities and into a bigger home in a smaller town, looks less clever when you owe the office 40 to 60 percent of your week as of September 2024. And if the RE/MAX forecast from September 2024 was right that the GTA stays balanced to the end of the year, with York Region growing and the City of Toronto flat, then where you buy matters more right now than when you buy.

The TD and Statistics Canada reports are the counterweight. A market being helped by rate cuts while a third of households are financially squeezed is not a market that races back to its peak. If a news story this month makes you want to move, fill out the form at the bottom of this page or book a free consultation and we will look at your situation properly first. Stay well and take care.