The trend to move out of cities and work remotely could be unsustainable: CIBC's Tal
The COVID-19 pandemic has transported many Canadians from the downtown cores of major cities to the comforts of home with the remote-work trend in full swing. However, one prominent economist is concerned that workers expecting the trend to last may be “overdoing it.”
Benjamin Tal, deputy chief economist at CIBC World Markets Inc., said some risks await Canadians when remote work is no longer an option post-pandemic.
“I believe that this trend is unsustainable,” Tal said in an interview. "It will probably continue over the next few months … but let’s picture our lives a year from now, 10 years from now. A huge amount of labour will go back to the office. A lot of that would be in big cities and all of a sudden you find yourself that you have to commute maybe two or three times a week.”
Tal said an end to the remote-work trend is “not a good thing, economically speaking.” He said workers will have less flexibility and longer commute times should their office life return to pre-pandemic norms. He also said it is also unclear how many employers will continue the work-from-home trend once the pandemic subsides.
“Another factor is that, yes, your current job allows you to work full-time from home,” Tal said. “What about your next job?”
Tal added that Canadians who bought a house in remote areas outside of major cities like Toronto, Montreal and Vancouver could find that they may also need to invest in living arrangements in the city that would provide them with a base much closer to work.
The shift could also challenge the suburban real estate market, Tal said. The pandemic created an optimal situation where many Canadians could purchase a home in a remote area at a lower price range. He warned that price acceleration in these areas would become a risk.
“The question is: To what extent are prices in those remote places rising way too fast?”