Condo market needs to keep up with evolving demographics
After about a decade spent building studio or one-bedroom condos to cater to millennials in the 25-34 age range, a new report says Toronto is facing a shortage of large units as that demographic ages. It’s becoming clearer every day that a larger number of family-friendly condo units are needed in the GTA. A new report suggests that the growing demand brought on by millennials getting older, settling down, and having children, as well as seniors looking to downsize while still having enough space for their “lifestyle and possessions” cannot be met by the number of large-enough units set to be constructed in the next five years.
Although more units than ever before (105,000) are currently being developed in the GTA, 41% have two or more bedrooms, while in the 1990s, 67% did. “Construction is still tilted towards one-bedroom units,” the report states.
Baby boom underway
In the next decade, the GTA will be home to an additional 207,000 inhabitants in the 35-44 age range—the steepest growth in that demographic for 20 years, and the age that more and more people are starting families. In June 2017, Social Planning Toronto released a report that found the number of pre-school aged kids in the city has doubled in the last ten years, indicating that a baby boom is already underway.
Research done by the Canadian Centre for Economic Analysis found Toronto has a “missing middle” between expensive detached homes and small condos in high-rise towers. This missing middle would consist of more spacious and affordable condos, townhouses, and lower-rise buildings. The report suggests that alternatives to high-rises may be more appealing to families. Mid-rise buildings, for example, tend to “include larger units and can be more attractive to families than high-rise buildings due to their moderate scale and better integration into existing communities.” City planners are also calling for developers to build units with stroller storage, movable walls, and shadow-free playgrounds.
The good news is that the proportion of units with three or more bedrooms is growing slightly, with a 1.2% bump in the number of pre-construction condos compared with the number being built now. The price of three-bedroom condos remains unaffordable to many, however, at an average cost of over $900,000.