Stuck on the Highway

It’s just a cultural norm in the GTA that you can send a text and just say “stuck on the highway” and you’re automatically excused from being late. In the GTA, it seems that housing capital migration is “stuck on the highway”, too.

I had to spit out my conclusion quickly to avoid whining about infrastructure, so let me clarify:

As people move through the GTA, either via step-up or drive-til’-you-qualify, they tend to do so along the same 400-series highway they are accustomed to using. Perhaps it was used for their last residence, job, or education. In my limited exposure to residential homebuyers, this is one of the only major consistencies I’ve been able to derive from conversations and surveys. This could be an ignorance bias because I’m just really emotionally unintelligent with housing decisions, or it could be a data point for the same reason. My emotional ignorance in housing demand has led me to look at emotion as information, and create a rational consumer profile from there. What that profile tells me is that people migrate along the highways they use most.

People move along their familiar transportation

I won’t ignore that a lot of these decisions that I’m calling transportation-focused may actually be more rooted in regional municipality, but there are one or two exceptions that make me think otherwise. So, what I’d say is that people are more likely to prioritize highway (or transit) proximity over region. Here is sort of the patterns in which we’ve seen people moving:

Drive til you qualify toronto gta graph showing most affordable areas for first time homebuyers

  • Along Highway 427/27: Mississauga > Brampton > Caledon > Orangeville
  • Along Highway 400: Vaughan > King > Bradford > Innisfil
  • Along Highway 404: Richmond Hill/Markham > Aurora/Stouffville > Newmarket > East Gwillimbury > Georgina
  • Along Highway 401: Pickering > Ajax > Whitby > Oshawa > Clarington
    There is a bit of an in-between here with 404/401 to Uxbridge area from Pickering/Markham. 

Toronto Map

So basically, if you currently live in a condo in Vaughan, you’re most likely to do your step-up into a home in Bradford so you can stay on the 400. If you’re at mom & dads in Markham, you’re most likely to move north into a home or condo in Newmarket area, so you can stay on the 404. This is by no means absolute, but it’s certainly a trend.

This trend plays an increasingly important role when we start to see how the east vs. west northern GTA functions moving forward. From my perspective, the importance of this cannot be understated on either side of Lake Simcoe. Boomers and their children will be the next largest groups of buyers. They have unique demands that municipalities along those shores must be aware of moving forward.

* I excluded Halton, because Oakville and Burlington function a little more independently as part of the GTHA and not just the GTA.

Why this is important

Emotion is still information. I’ve always been fascinated by unpacking a buyer’s journey to get an understanding of the how and why they ended up there. The decision is always more complicated than it seems. A collision of hundreds of different variables were all evaluated subconsciously in order for every party to a transaction to arrive at a consensus, and ultimately purchase a home.

Commercial property, land development, and investment is pretty simple – it either works or it doesn’t. Housing, on the other hand is vastly different. Where commercial transaction is the head of real estate, housing is the heart. People buy with every bit of emotion they can muster up, attaching future experiences, life milestones, past memories, and even furniture, to every room in every house they’re shopping through. I’ve never been good at working with this type of buyer, and I only really do so with friends & family, as they still see enough value in the quantitative expertise I have. Even in these scenarios, I can’t help but hear a good friend’s voice in my head wanting to tell them:

Never fall in love with a piece of dirt. 

I think this is all important for brokers who are looking to understand where their future clientele may be coming from or going to. It’s important to municipalities who are ultimately in the job of attracting people, and compete with one another in that respect. It’s important to you and I, as consumers and as human beings, to wonder and ponder briefly toward a little bit of self awareness next time we make this type of decision.

I also think this is important because it plays a role in the way we (GTA regions) interact with the City of Toronto and with one another in terms of employment, commuting, transit, and capital migration. I think there are some other conclusions to be drawn, one of which I’ll be writing about soon, in how provincial highway systems and transit can segregate working classes (blue vs. white collar) in different areas.

Greater Toronto Area real estate capital migration patterns
Original graphic I did on my ipad that ultimately became this blog post. The migration of housing capital seems to be pretty well attached to provincial infrastructure and 400-series highways

 

Leave a Reply