How Amazon HQ2 Could Impact Toronto Real Estate — If It Wins The Bid
Toronto is my nearest big city. As a result, the city, and its real estate market, has a heavy influence in my business and, speaking more broadly, the city’s real estate market in many ways has an influence on the national real estate market.
One of the biggest pieces of news to come out of Toronto was the announcement that it was on Amazon’s “short list” to become the new location of one of the company’s headquarters. The search for the second Amazon headquarters, also known as Amazon HQ2, narrowed down the list from 238 hopefuls to just twenty, according to Forbes, and Toronto was on the list. In fact, Toronto is the only Canadian city left in the “contest” — the only city outside of the United States at all, actually.
This is very exciting news for tech-industry folks; after all, it could be a real boon to have such an e-commerce giant locate its second “home” in the city of Toronto. However, it could spell mixed news in other areas — namely, real estate.
Industry experts say the arrival of Amazon to the Seattle area “without a doubt” had an effect on the city’s real estate market. It almost certainly helped sales, which was a good thing for those in the real estate field. But it was not such a good thing for people trying to buy in Seattle, especially those who had been there and watched the change happen rapidly after Amazon
made its first home there.
Outlets like MarketWatch agree that if Amazon HQ2 comes to Toronto, it would definitely impact the housing and rental prices in the city. However, a lot of experts say the new headquarters might have more of an effect on smaller cities than it would on more established metropolises.
Toronto already has a pretty impressive tech base, and could be in the “sweet spot” of already having the talent Amazon needs without an influx of new residents to upset the real estate market.
It’s not a question of whether real estate in any city would be affected by the arrival of a major Amazon location — it would be. The question is how much. And that all really depends on how the company increases area salaries, and how much of a demand there is for housing for the workforce. If there’s already enough tech talent in the area, the precarious balance of rental or housing prices might not shift too much. But it’s all really a guessing game when it comes to exact effects on the market.
There’s no doubt that housing affordability will be a concern when it comes to the location of Amazon’s HQ2. The question is, will all the other benefits of having an Amazon hub outweigh the negatives for cities looking to woo the e-commerce leader? Having Amazon in Toronto would absolutely impact the real estate market there — but it could be worth it if it means we can permanently establish the city as a leader in technology and innovation for years to come.