Micro-condos a growing trend in major cities
Cozy little homes with inventive solutions to compensate for the lack of space are a growing trend in Canada’s pricey cities, offering younger buyers a way into the increasingly inaccessible real estate game.
It’ll be some time before Canadians are living in the walk-in-closet-sized apartments that are not uncommon in Japan, but the size of new condos is quickly shrinking, notes Ben Myers, executive VP of Urbanation, a condominium market research firm.
“It has been pretty drastic in the new condo market,” said Myers.
Canada’s major cities have all begun to see apartments and micro-condos under 400 square feet—roughly the size of two parking spots. One project in Toronto, DNA3, is still being built but has already sold out of 270-square-foot units.
Market analysts say the average condo size is rapidly shrinking, with overall footage dropping about 80 square feet in the last four years alone.
“It has gone down pretty drastically over that just-over-four-year period,” said Myers.
“Before, something like 375 [square feet] was considered extremely small. Now we have gone down to 277—it’s pretty unbelievable.”
For those looking to live in the heart of the city, there are fewer options as prices continue to rise. For these urbanites, location is key, the city is their living room, and a smaller home is a sacrifice they are willing to make to have luxurious amenities in the heart of the city.
Myers believes the micro-condos are being rented out by investor buyers.
Matthew Slutsky agrees. His company BuzzBuzzHome.com, which tracks development listings, is tracking over 100 units smaller than 400 square feet being built in B.C.’s Lower Mainland and in the Greater Toronto Area, with a few units in Calgary, Montreal, and a handful more scattered around the country.
Slutsky suspects that as developers opt out of building new rental properties, investors are opting in, buying properties for residual income rather than residence.
“There is a complete shift in what is being brought to market because of that,” he said. “This could be seen as the new rental stock.”
For the Young and Hip
Micro-condos are being marketed to younger buyers looking to live close to the action of downtown. One project, Neon Condominiums at Toronto’s Yonge & Eglington intersection, offers a vision of urban living on the splash page to its website.
Trendy lounge music plays as the neon profile of a woman appears, standing boldly and holding what appear to be designer retail shopping bags.
The smallest units are 310-square-foot studio apartments. In line with similar developments, the building offers high-end amenities, including a rooftop terrace, fitness gym, theatre, party lounge, and a 24/7 concierge stationed in the stylish lobby.
Myers and Slutsky both noted that buyers are willing to trade space for location and amenities.
Micro-condos tend to be built with upgraded tech, including combo washer/dryer and smaller, high-end appliances. Many come with Murphy beds and meticulous floor plans that make the most out of limited space.
The downgrade in square footage has even impacted the size of furniture, according to a sales director with Mobilia, a specialty furniture importer in Toronto.
When asked if furniture was getting smaller not only in Toronto but in other cities as well, Mobilia sales director Denys Lavoie said, “absolutely.”
Word on the street is micro-condos rent fast. That’s been the case in Vancouver, and sell-outs elsewhere indicate they have found a niche in the market.
When a run-down heritage building at 18 West Hastings in Vancouver occupied by low-income renters was converted to tiny apartments, they were hungrily filled by renters looking for a classy space in the middle of the action.
The units came with high-end cabinetry and interior touches like floor-to-ceiling tiles in the bathroom and glass cabinetry in the kitchen.
Though the micro-lofts at 18 West Hastings measure as small as 226 square feet, they rent for $850 a month. Architect Bruce Carscadden said the project let the developer make the most of the space.
“They are small, but they are not cheap,” he said.
While the market has slowed in recent weeks, and the prospects of a price correction seems more possible than before, housing prices in Canada out of reach for many buyers.
That means Canadians are likely to see a growing number of these tiny condos. Whether that trend will extend to standalone housing, as has happened in some countries, has yet to be seen.