John Bent­ley Mays – Globe and Mail

After 60 years of relent­less advance into every cor­ner of Toronto and the sur­round­ing region, sub­ur­ban tract-house sprawl is slow­ing, and may be grind­ing to a halt.

Blame it on the condo tow­ers. A cit­i­zen of the Greater Toronto Area who hits the streets in search of a newly built home to buy these days is more likely than ever before to land in a con­do­minium high off the ground.

But if the GTA is turn­ing into a mega­lopo­lis of condo–dwellers, we’re doing so in units that are con­sid­er­ably more com­pact than they were just a few years ago. The aver­age area of a new condo nowa­days is 820 square feet, down by 100 square feet – that’s the size of a 10-by-10-foot room – from the mid-2000s. Devel­op­ers, it’s plain to see, are build­ing ever-smaller con­dos, a move that is encour­ag­ing home-buying Toron­to­ni­ans to cre­ate smaller fam­i­lies and live more effi­ciently now than at any time since the Great Depres­sion. At least for most peo­ple in Hog­town and its envi­rons, the post-war era of the spa­cious new detached house is well and truly over.

These are a few con­clu­sions that can be drawn from an inter­est­ing study of the GTA’s $22-billion new hous­ing mar­ket recently com­pleted by Real­Net Canada Inc., an impor­tant Toronto-based provider of real-estate infor­ma­tion and analy­sis, and its part­ners in Toronto’s Build­ing Indus­try and Land Devel­op­ment Asso­ci­a­tion (BILD).

The sur­vey looked at the nearly 46,000 pur­chases of new digs that took place in the region last year, and dis­cov­ered that 62% of them involved con­dos in tall stacks. That’s a dra­matic turn­around from just a dozen years ago, when new high-rise con­dos and lofts com­manded only 23% of res­i­den­tial mar­ket share and sales of low-rise dwellings (detached and semi-detached homes, town­houses) accounted for most of the remain­ing 77%.

Dri­ving this change (which shows no signs of abat­ing), at least in part, is the lower price of con­dos. The aver­age cost of a new low-rise home in the GTA increased by 8.4% dur­ing 2011 to just over $545,000, while that of a high-rise condo actu­ally fell a cou­ple of per­cent­age points to around $434,000. Of course, you get much less house in a tower than you get on the ground: The aver­age dif­fer­ence between the two is 820 square feet ver­sus 2,400 square feet. The RealNet/BILD review did not exam­ine the rea­sons that GTA con­sumers are ready to pay some­thing approach­ing house prices for con­dos with a third of the area a new house affords.

Com­ment: Peo­ple pay for the condo so they can live down­town. Com­mute or small condo? For many that is an easy choice.

We can all guess what those rea­sons are, but far down the list, appar­ently, is zest for condo liv­ing. George M. Car­ras, pres­i­dent of Real­Net Canada, believes that the GTA’s bull­ish mar­ket in new high-rise apart­ments is mainly pow­ered by a con­spic­u­ous short­age of any­thing else to buy.

“You’re see­ing the ulti­mate supply-driven slow­down,” Mr. Car­ras told me. “New low-rise hous­ing has declined over the last decade. Unfor­tu­nately, no one really sees that, unless you do what we at Real­Net do. It’s easy to see a 30-storey build­ing. It’s hard to miss the new condo tow­ers and cranes that are pop­ping up in the city. What’s really easy to miss is the shrink­ing num­ber of detached-house sub­di­vi­sions in the GTA. That story has not been told.”

The story Mr. Car­ras is think­ing of, he said, has one prin­ci­pal author: Ontario’s provin­cial gov­ern­ment. Seven years ago, Queen’s Park laid down sweep­ing new land-use reg­u­la­tions designed to boost den­sity in the province’s built-up areas and curb the gobble-down of the coun­try­side by sub­ur­bia. “What we’re show­ing is how the mar­ket has shifted since the province intro­duced the growth plan back in 2005,” Mr. Car­ras said. “All we are see­ing is the ulti­mate play-out of those guide­lines, which the devel­op­ment indus­try has to abide by.”

In fash­ion­ing the new rules, Ontario was try­ing to deal con­struc­tively with two closely related issues: the impend­ing dis­ap­pear­ance of the last GTA green­fields and brown­fields suit­able for low-density res­i­den­tial devel­op­ment, and the expected arrival in the area of a great many new­com­ers from across Canada and from abroad over the next few decades.

“When you look at the data,” Mr. Car­ras observed, “you find that the region has grown by 2.5 mil­lion peo­ple over the last 30 years – by 98,000 annu­ally in the last 10 years. We sold more than 40,000 new homes in 2011. For every 10 new peo­ple that exist in this region, we sold four new homes, which works out to be about two and a half peo­ple per home. That’s not an out­ra­geous number.”

“The ques­tion then becomes what kind of homes are we deliv­er­ing, and that’s where the shift is really pro­nounced. You’re look­ing at smaller house­holds – and cer­tainly more intense living.”

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Con­tact the Jef­frey Team for more infor­ma­tion – 416−388−1960

Lau­rin & Natalie Jef­frey are Toronto Real­tors with Cen­tury 21 Regal Realty.
They did not write these arti­cles, they just repro­duce them here for peo­ple
who are inter­ested in Toronto real estate. They do not work for any builders.
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