The Canada Mortgage and Housing Corporation sees moderation in our future, but it means more buyers need to start embracing the possibility of high-rise living, or at least high-density. And according to a recent study, condos are not the ideal home for many Canadians.
I was reading over CMHC’s 2018 Housing Market Outlook and they foresee an increase in new home supply over the next couple years, which is fantastic, but most of these new units will be high-rise condos. That’s good news to me and anyone else who believes high-density housing is key to accommodating our growing population and improving affordability, but for many families, a condo is not preferred.
When Sotheby’s International Realty Canada released the first part of its 2018 Modern Family Home Ownership Trends, the thing that jumped out to me the most was that 83% of young Canadian urban homeowners would prefer to live in a detached home if budget wasn’t a concern. I couldn’t believe that only 5% preferred a condo, and most of those surveyed were millennials and younger members of Generation X.
In Toronto specifically, around 82% still preferred a detached home if budget wasn’t a concern. Fortunately, those who preferred condo living had roughly a 19% share. This is still pretty low though.
I think this is a problem.
Don’t get me wrong – I’m all for single-family communities, but we need more couples willing to start families in condos. According to the Building Industry and Land Development Association, the population of the GTA is expected to hit 9.7 million by 2041. The only way we can build enough housing with the land we have is to build up.
If demand continues to outpace supply, the affordability issues we’re experiencing will only worsen. We need more stacked townhomes, more mid-rise condos, and more high-rise condos, and we need these to be designed to accommodate families. That means we need more two- and three-bedrooms. In order for more families to want to live in condos, they need to be designed to suit their lifestyles.
But, if we’re talking about building condos for families, then we have a chicken and egg scenario. Builders won’t design an entire condo based on family living if they don’t know if families will embrace the condo lifestyle, and families won’t buy in condos that don’t make sense for kids.
So, which comes first? Should builders be designing for families and hoping they buy, or should families be buying condos to prove the demand is there? It’s a tough question. A study like the one Sotheby’s just released definitely won’t convince any builders to develop family-sized condo units.
CMHC says moderation is in our future, but I’m inclined to predict soaring prices in the new condo market, as high paying job opportunities continue to open up in Toronto.