The Ryerson City Building Institute and Urbanation released a joint report proving that there is a strong demand for family living in condos, and that demand is just going to get stronger.
“Bedrooms in the Sky: Is Toronto Building the Right Condo Supply?” focuses on aging millennials, baby boomers, and affordability issues, all of which point to a higher percentage of the population buying and living in condo units.
According to the report, there are currently 105,000 condo units under development in the Greater Toronto Area (GTA), 94% of which are pre-sold and will be delivered over the next five years. This is the highest amount of condo units that have ever been in development at one time, and at least 50% are sold to investors.
The price gap between detached homes and condo units has tripled since 2007. A decade ago, the price gap was $200,000, today it’s $600,000. The average detached home in the GTA is priced at $1,134,000, whereas the average price of a condo unit is $511,000.
With the quickly rising prices in the detached home market, more and more families are looking to stacked condo townhomes, and mid- and high-rise condo towers to raise families.
One of the problems with this is that only 41% of under construction and preconstruction units have two or more bedrooms. The condo market is still catering to the one-bedroom buyer. There is a bright side though because three-bedroom units are trending up (but they’re averaging $900,000).
Millennials and baby boomers want the same thing
It’s happening – millennials are growing up and they want to start families. Between 2016 and 2025, the 35-44 year old demographic is expected to grow by 207,000. This leads to an increased demand for family style housing.
The baby boomer population is also expected to grow to over 484,000 in the next 10 years. The problem is they’re looking at the same housing as small families when planning to downsize.
What’s the solution?
We recently had the opportunity to chat with Frances Martin-DiGiuseppe, Architect, OAA, AAA, MRAIC, Principal, Q4 Architects. Her firm focuses on designing missing middle typologies in order to improve housing affordability in urban centres.
Frances explains missing middle typologies as “housing that falls between the two extremes of detached single-family homes – which we have no space to build now – and high-rise multi-residential units – which can be intimidating and often lack the facilities and community space desired by a young family. We believe that building more of these types of homes is one of the most positive ways that we can future-proof our cities.”
The report says only 3% of condos in the pipeline are under five-storeys and just 7% are between five and eight storeys. Should the GTA be pushing more of this kind of development in order to accommodate aging millennials and downsizing boomers?