It’s common knowledge that there are too few detached houses available to satisfy the demand of Toronto real estate buyers – and, according to the latest data, many are turning their sights to the condo market instead.
The Toronto Real Estate Board’s (TREB) Q3 Condominium Report finds condo sales are up 22.1% from this time last year, with 8,014 units changing hands. It also reveals that there are fewer condos available for sale, with new listings down by 13.3% – a sign that the segment is becoming more competitive. The average price of a unit in the GTA rose 9.6% to $415,63.
Condos Still an Affordable Starter Home Option
TREB President Larry Cerqua says that condos’ relative affordability means they’re increasingly becoming an option for buyers who have found themselves priced out the the detached and townhouse market in Toronto, such as young families.
“The annual rate of condominium apartment price growth has accelerated over the past year as the supply of units available for sale become more constrained while demand remained strong,” he stated in TREB’s report. “Price growth remains well-below those for low-rise home types. Condo apartments continue to be an affordable entry point into homeownership for first-time buyers.”
Supersize My Unit, Please
The fact that more families are turning to high-rise living rather than commute from suburbia isn’t lost on real estate developers, who are starting to build larger units with more bedrooms to accommodate the demand for more space. According to Building Industry and Land Development Association (BILD) President Brian Tuckey, the average unit size has grown over the past year.
“This year we have seen the introduction of larger suites aimed at purchasers who have been priced out of the low-rise market,” he says. BILD’s latest report finds the average condo unit size is now 809 square feet, up from 767 year over year. The cost per square foot has also increased to $601, up $26 from last year. According to BILD, condo sales accounted for 60% of the 34,736 home sales in the GTA between January and September, as the supply of low-rise housing dries up – only 764 detached homes were listed for sale in August.
City infrastructure is also rushing to keep up with the growing needs of families in areas originally developed for the typical 20-something condo crowd. CityPlace, Toronto’s largest housing development located within the city’s former Railway Lands, is growing at an annual rate of 15%, and is slated to receive two much-needed schools and a daycare centre by 2019. The issue of overcrowding and closing schools plagues the neighbourhoods of Yonge and Eglinton, as local schools simply can’t keep up with the influx of new condo residents.
Related Read: Consider Schools When Buying in a New Neighbourhood
Following Vancouver’s Footsteps?
The fact that developers recognize the need for larger condo units sheds hope that Toronto may avoid a Vancouver-style family exodus. While detached homes in the west-coast city have been out of the question for middle-class buyers for years, families are also suffering from a severe lack of affordable high-rise options. Units with three bedrooms that are priced below $500,000 account for only 1% of housing stock in Vancouver proper, and only 15% throughout the region.
As a result, parents who choose to live within the city are forced to get creative with space to accommodate their growing families. According to a Financial Post report, one such family resorted to erecting temporary walls to create a “baby box” nursery, while another has repurposed their laundry room as baby sleeping quarters. It’s hardly a long-term solution; Vancouver is seeing a drop in its population of children, with 58% of families saying the plan to leave the city within the next year.
Do you think larger condo sizes will offer more affordable options for families? Tell us your thoughts in the comments.
