Why condos keep getting smaller
John Greenwood – Financial Post
It’s become a mantra among urban planner types: If cities like Toronto are to grow successfully, they must make more efficient use of space.
Which partly explains the condo boom. Instead of opting for the kind of houses with big back yards favoured by their parents, new arrivals and the offspring of the existing population are sacrificing all that for affordability and (usually) a central location.
According to the development industry, the condo boom represents a massive shift in the way people in cities choose to live.
But if that’s the case, then why are there so few units designed for families? We know the divorce rate is soaring and people are opting for fewer kids but that hardly explains why in the first quarter of last year there was only one four-bedroom unit that changed hands in the last three months of 2011 in the whole of Toronto.
Comment: Which was probably the ONLY four-bedroom unit in the whole of Toronto. And I am sure it was well north of $1 million.
A recent report by Urbanaton, a Toronto-based consultancy, found that of 3,987 transactions reported in the period, 48% were one-bedroom plus den or smaller and 30% were two-bedroom, while just 4% were three bedroom.
Not much room for traditional families.
Here’s an intersting factoid: Condos are getting smaller. The average unit sold in the first quarter of 2012 was just 904 square feet, compared to 1052 square feet in the first quarter of 2001.
Comment: I wish I knew where these averages were coming from. The average one-bedroom, or one-plus-den, that I show to young singles or couples are more like 600sf… 700 if they are truly lucky. The stats are skewed, they show the average price being $360k and the average size being 900sf. If I could find people 900sf downtown for $360,000 on a consistent basis, I would be the top condo realtor in Toronto.
We know that there are more condos either on the market or about to come on the market in Toronto than in any other city in North America, and that high-rise units make up a substantial and rising proportion of housing in the city. In 2011, 46.5% of all the mortgage insurance issued by the Canada Mortgage and Housing Corp. went to loans for multi-unit residential housing, largely made up of condos.
So here’s the question. What’s going to happen when all those people start having families? More important, what’s going to happen to condo prices?
Comment: What do you mean “when it happens”? Why do you think there are knife fights over houses near Withrow Park? The first few cohorts have reproduced and they are cruising Leslieville with their Stokke strollers, looking for PODs and dreaming of bully offers. It will do nothing to condo prices, but it has sent house prices soaring. My kids are barely in school yet and I have started putting money away for them, for their first down payment. Seriously.
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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