When only a two bedroom condo will do
The two bedroom unit is growing in popularity - the reign of the one-bedroom unit appears to be over in the GTA, as buyers demand bigger suites and dens
Excerpt from an article by Stephen Weir - Toronto Star
It may be a city filled with one-bedroom condominiums, but the two-bedroom unit is becoming king. If you believe the experts, more and more Torontonians are moving up to bigger condos that include at least two bedrooms in the floor plan.
Both builders and consultants agree – there is an increased demand for two-bedroom and two-bedroom-and-den condominiums by singles and childless couples in the Greater Toronto Area. In fact, over the past four years, the number of new two-bedroom condos sold in the city increased by 8%, while one-bedroom sales fell by 5%.
“As the new condo market moves from small specialty to mainstream housing, we are seeing a shift in consumer choices, right across the GTA. Builders build to sell and two bedrooms are in demand right now, so these types of units are obviously being constructed,” he says.
Survey results supplied by N. Barry Lyon Consultants Ltd., show that the proportion of sales of two-bedroom condos (including two-bedroom and two-bedroom-and-den) has risen over the past four years. In 2002, 5,990 new two-bedroom condos were sold, accounting for 38% of all sales. In just the first nine months of 2006, 6,383 two-bedroom condos were sold, accounting for 46% of the new condo market.
A breakdown of the two types of two-bedroom condos shows the greatest growth coming in those that include dens.
It’s a diverse group of people buying the larger condos – empty nesters, childless working couples, one-bedroom condo owners moving up and new Canadian families.
“We have seen a shift in the demand toward larger condo units,” said Linda Mitchell, vice-president of sales and marketing for Monarch Development Corp., which has built more than 5,000 condos in the GTA.
“I would say we don’t track numbers that closely, but when we began, our buildings were 60% one-bedroom condos and only about 40% were two-bedroom condos,” she says. The company is marketing condos in 11 projects throughout the GTA, all of which have one- and two-bedroom units.
The industry is well aware that Toronto is North America’s condominium capital. According to Lyon, what makes the city remarkable is that there are projects in every part of town and this diversity has fuelled the two-bedroom condo trend.
“There is no part of Toronto that doesn’t have a condo, except the islands. This is very unusual – you don’t see it anywhere else in North America,” Lyon says.
“As the city ages, people are looking for a way to stay in the community that they live in. It is not just first-time buyers any more. Empty nesters want to be close to their roots and people who have lived in a one-bedroom for a few years want to stay but need more room.”
In the 1990s there was a large move toward lower-cost high-density urban development. First-time buyers and investors bought into the burgeoning condo market by snapping up bachelor suites and one-bedroom condos even before they were built. A decade later, those first-time buyers have often outgrown their digs.
But it doesn’t appear as if the market shift toward two-bedroom condos has taken hold in the resale market, according to Wendy Craven of the Toronto Real Estate Board.
“One-bedroom condo sales have gone up 10% over last year, to 760 from 688. Two-bedroom condo sales have declined marginally, to 343 from 344 last year.”
But Toronto Real Estate Board president Dorothy Mason figures that the slightly smaller demand for two-bedroom condos is an anomaly that will correct itself.
“Our data indicates the demand for two-bedroom condos is unchanged from the previous year,” Mason says. “At the very least, it’s accurate to suggest that the demand for two-bedroom condos is in line with the entire resale housing market.”
In any given complex, bachelors, one-bedroom condos and two-bedroom condos usually have many of the same fixed costs such as appliances and sinks. But the smaller the unit, the more those costs are reflected in the price, making the two-bedroom condo a better buy.
“The biggest turning point (in the emergence of the two-bedroom condo) has been the market’s acceptance of an inside bedroom without a window,” Monarch’s Mitchell says. The “wide-shallow split” is probably the most popular two-bedroom condo design in Toronto right now. This layout places the living room and dining area between the bedrooms, and all rooms have windows.
“Right now, we are selling the two-bedroom condos two to one,” says Nestor Repetski, senior partner at Winick Realty Corp., which represents the West Harbour City project east of the Canadian National Exhibition grounds. “For every one-bedroom-and-den we sell, we move twice as many two-bedroom condos. Five years ago, we weren’t even building two-bedroom condos; now our advertising slogan is ‘big corner suites.’
The units have been quickly absorbed by emptynesters and young buyers who just want more space. The singles are still going fast, attracting first-time buyer attention.”
Even as the square footage for two-bedroom-and-den units now rivals starter townhouses in the suburbs, there is a reluctance among Canadians to rear their children in a highrise. But there are signs that might be starting to change. Young couples who have been living in condos for a decade, are now having children.
While many make a white-picket fence decision and move outside the city, a few opt to raise baby in a loft or tower. Daycares have begun to appear around condominium sites and new schools are being planned near large developments.
It depends on your mindset, explained Veronika Belovich, director of sales and marketing with Crystal Blu, a soon-to-start 35-storey tower in Yorkville.
“Our project will have 138 units, 70% of which will be two-bedroom condos. We are seeing buyers with children. Most appear to be moving to Toronto from outside of Canada and don’t have any bias against raising children in a luxury building.”
“As a nation, we say that we want to limit sprawl. We should be raising children in two-bedroom condos – it only makes sense.”
Facts and figures (Barry Lyon Consultants Ltd. and Realnet Canada Inc.)
» In 2002, one-bedroom condos accounted for 48% of GTA condo sales. In the first nine months of 2006, the percentage was just 43.
» Sales of traditional one-bedroom condos have decreased, while sales of two-bedroom-and-den units have risen proportionately.
» In 2002, two-bedroom condos accounted for 38% of sales in the GTA. In the first nine months of 2006, sales of two-bedroom condos claimed a 46% market share.
» Studio units now have an average starting price nearly on par with the starting price for one-bedroom condos in 2002 – about $150,000 to $160,000. In 2002, the average starting price for a studio was approximately $125,000.
» one-bedroom condos and one-bedroom-with-den units started at $160,000 in 2002. Prices, depending on location, now start between $190,000 and $200,000.
» The size of one-bedroom condos has changed little over the past four years, averaging about 650 to 700 square feet.
» In September, two-bedroom condos (including ones with dens), started at $250,000 downtown. Similar condos started at $220,000 in 2002.
» The average size of a two-bedroom condo is between 850 and 900 square feet.
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