Daniel Moscovitch had always wanted to leave his hometown of Winnipeg for greener pastures. For a while he did, moving to Vancouver in 2008, when he was 24, then living in Tel Aviv for six years and returning to Vancouver two years ago, where he had hoped to finally build a family and a career. As the now 33-year-old entrepreneur started thinking more about settling down, though, he had trouble figuring out how to make Canada’s most expensive city work.
He had been sharing a two bedroom, 800 square-foot condo – his roommate owned it, buying it before the real estate boom; he paid her $1,300 a month in rent – and while it was well situated in the city’s Mount Pleasant area, his tiny room had just enough space for a double bed and a small desk. Buying a house in a city where the average home price topped about $1.08-million in August, seemed to be an impossible task.
Meanwhile, in Winnipeg, where the average home price is around $300,000, his friends were buying homes and saving money. While creating a business in Vancouver seemed ideal – he runs More Hot Leads, a digital marketing company – his dream to build a life out West changed. “I felt like I had returned to Vancouver at a bad time, like I was too late,” he says. “And I started thinking about what lifestyle I want for me and my future kids.”
He moved back to Winnipeg in March.
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Over the past many decades, leaving home to make it in bigger cities, such as Toronto, Vancouver, New York and elsewhere, was a rite of passage for the many 20- and 30-somethings who grew up in smaller locales. These cities had more jobs, more energy and, until recently, a reasonably priced housing market.
Now, people like Mr. Moscovitch are finding it difficult to live in these expensive cities, even if the opportunities and nightlife are still there. Since 2009, the average sale price for a home in Toronto has jumped by 94.6 per cent, while Greater Vancouver’s average home sale price has jumped by 101.5 per cent, according to the cities’ real estate boards.
Stats around whether younger Canadians are choosing to stay closer to home are still sparse, though Statistics Canada did find that between 2012 and 2017 Toronto’s net interprovincial migration – the difference between the number of people moving into Toronto and moving out of it and into different areas of the province – was minus 142,465. British Columbia’s Lower Mainland, which includes Vancouver, also saw more people leaving than arriving, with a net interprovincial migration of minus 18,670.
While Statscan doesn’t say why these cities are experiencing these trends, Patrick Adler, a research associate at Toronto’s Martin Prosperity Institute, says “there might be an aversion to the high sticker prices on property in Toronto or Vancouver.”
More data are needed to conclude that millennials are giving up on their big city dreams, he adds, but other polls show that people are reconsidering the big city. A Forum Poll, released in September, surveyed 811 Torontonians and found that 79 per cent of them say the city is becoming unaffordable.
An Angus Reid poll, released in August, said that 59 per cent of renters in Toronto between the ages of 18 and 34 are “seriously considering" leaving the Greater Toronto Area because of the high cost of owning a home.
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While more research may be needed, anecdotally, Mr. Adler says that people do seem to be leaving larger locales for smaller cities – he’s heard many stories of people moving for a more affordable life – but the decision to live in less pricey places involves more than dollars and cents.
Work is a big determinant of where people end up and bigger cities still offer more jobs. Once you get that job, it can be hard to leave it. “You become a lot more risk averse [when you find work],” Mr. Adler says. “You become a lot less likely to leave a stable job.”
If you’re in an industry that’s in demand – a tax lawyer in St. John’s can still find interesting work, Mr. Adler says – or if you’re an entrepreneur, such as Mr. Moscovitch, where you can work from anywhere, then affordability starts playing a larger role in one’s life decisions.
“As long as I have internet and businesses want my services, I can work,” Mr. Moscovitch says.
A changing dream
Andy Yan, director of Simon Fraser University’s The City Program, which offers courses on urban issues, suggests the trend is being driven not so much by the decision to move to a bigger city as much as the decision to stay put. People in their 20s will always move to Vancouver to “hang out on the West Coast,” he says, but “having a roommate doesn’t work as well when you’re 37 and married.”
It’s those in their 30s, he says, who are the ones shifting their priorities and their perceptions around what it means to be successful in Canada. However, he doesn’t just blame high housing prices for any exodus – wages aren’t growing fast enough either, he says.
Mr. Yan conducted a study looking at the median housing values of various North American cities, as well as median incomes. He found that while Vancouver is the third most expensive city to live in, it is ranked 50th in income, with a median household income of $72,622. Toronto’s ranked 32, with a median household income of $78,373.
San Jose and San Francisco, where all the big tech firms are located, are the first and second most expensive cities in North America, respectively, but they’re also No. 1 and No. 2 in median household income. If median income were higher in Canada’s largest cities, then those 30-somethings would make these urban hot spots more of a long-term destination, he says.
New opportunities at home?
People staying put will eventually have an impact on Canada’s economic makeup, Mr. Yan says. Already, Vancouver’s tech sector is having difficulty filling jobs, while Victoria, which has cheaper housing than Vancouver, is growing its own tech industry. "Anecdotally, you’re seeing some really interesting tech firms rise up in Victoria, which has mostly been known a sleepy government town,” Mr. Yan says.
If Vancouver were more affordable, Mr. Moscovitch likely would have stayed. While he still has mixed feelings about moving home – Vancouver is a great place for networking, he says – he’s also happy to pursue his dreams from somewhere else if it means being able to buy a home and save money for retirement.
Indeed, over the past six months, he’s been able to save more in his registered retirement savings plan than ever before. It’s also nice to be closer to his family and his girlfriend. He does feel as if he’s missing out on some things, but he still travels back to Vancouver every couple of months to visit clients and run networking events.
Who knows what the future holds, but, for now, he’s happy. “Because of the affordability,” he says, “people can live a good life.”