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Has working from home has gone too far? Economists are concerned

Are we headed for an employment and real estate crash? Some Canadian economists see dark clouds on the horizon.

Many Canadians have radically changed their work and lifestyles in the wake of the COVID-19 pandemic. People have lost jobs, transitioned careers, and a great deal of us are working from home.

While after the first wave of the coronavirus seemed to taper off in the summer, the fall and winter resurgence has kept much of the country in lockdown. This trend towards remote working, and spending all of our time at home, has led to a mass migration out of the urban centres towards smaller towns and cities.

Halifax has been one of the fastest growing communities during this period.

This movement drives up the cost of real estate in the suburbs and smaller towns as the demand for properties rapidly rises. Economists are starting to express concern that that the current situation is unsustainable, and could have negative repercussions on the economy and housing market for years to come.

“The question is: To what extent are prices in those remote places rising way too fast?” asks Benjamin Tal, deputy chief economist at CIBC World Markets Inc., in an interview with Bloomberg.

“I believe that this trend is unsustainable,” Tal said. “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.”

Enjoying working from home? It may not last.

Even if your current work allows you to continue to work from home even after the pandemic, there is no guarantee that future jobs will have the same flexibility. So, people who moved to a small town during COVID could find themselves far from any potential opportunities the next time they need to look for work.

Tal points out that when companies resume having their staff on-site at their workplaces, employees who have been working from home — especially those who moved to suburban and rural areas, could eventually find themselves dealing with less work flexibility and much longer commute times.

A return to the workplace could disrupt the real estate markets in the suburbs and rural areas of the country and wreak havoc on the work style that many Canadians have become accustomed to during the pandemic.

The market and prices for rural homes could shrink, as people need to commute long distances into the city for work, or – depending on how far away they have moved – possibly even maintain a secondary dwelling closer to workplace.

The economic consequences of this are potentially numerous.

On the flip side, some experts believe that many professionals will never return to the office. The cost savings for employers and work life balance for workers are just too great, and this situation has proven that we can make it work.

“Most organizations transitioned to remote work because of the pandemic, and employees have proven they don’t need to be in the office to be productive,” said David King, Canadian senior district president of Robert Half. “Now that companies are set up to support working from home, workers are more likely to pursue moving to an area that will enhance their standard of living and quality of life.”

So, what do you think? Have we created a new way of working, where professionals can live anywhere and perform their work successfully from home, or will we all be heading back to the workplace once it’s safe to do so?

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