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895 Don Mills Road
Suite 202
Toronto, ON M3C 1W3
Cell: 416-708-0556
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Work Phone: 416-391-3232
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Micro Living


For years, if you wanted to see creative small spaces you had two places to look: trailers and boats. With a growing population in the city of Toronto people are trading space for location if they want to live in the downtown core.

Currently under construction at 219 Queen St. West is the 256 suite condo development called Smart House. Sales for available units start at $422,500 to over $590,100. Not all of the units in the building are micro condos.

Canada completed the last census in 2011. According to Stats Canada the population of Canada was 33,476,688. The population of the GTA in 2011 was reported as 5,583,064. Wikipedia reports that the population of the GTA in 1985 was 3,733,085 (number tabulated to account for current boundary of the GTA).   Downtown is by far the most densely populated area in the GTA but certainly does not account for the largest footprint. People want to live downtown; particularly young people. Transportation is excellent, there is lots of entertainment within close walking distance and there is, of course, the “vibe” that only an inner city has. So, it stands to reason that with a growing population in a stagnant geographical space, housing is at a premium.

The average price of a detached home in the 416 area of Toronto is now $1,040,018. Average for a semi-detached is $702,035 and a townhouse $507,843. The average price for a condo in the 416 exchange is $369,655. So, it stands to reason that if you like to live downtown or work downtown and don’t want to commute the future of life in our downtown core is, well, small, from a space point of view.

The average per square foot cost at Smart House is $830 per sq. ft. And the anticipated maintenance fees are .58 per sq. ft. per month. The current average downtown list price per square foot is $595. The average maintenance fee in Toronto is .50 per square foot. Smart House’s initial maintenance fee is as low as it will ever be as we know that these fees are lowest in a brand new building, while the Toronto average is all buildings and not just new condos making this a higher than normal starting point.

Some 467 units of 500 square feet or less are currently in the occupancy phase in the City of Toronto, about five per cent of the new condos coming on stream in the core this year, according to condo research firm Urbanation. In additional 2,868 of these smaller units will be occupied by the end of 2015. Thousands more are in the planning or construction phases.

Buyers occupy the units they have bought prior to the registration of the condo and pay an occupancy fee during this phase as a kind of rental fee. A Title to the property is not obtained until the building is registered and banks will not grant a mortgage until Title is received. Consequently, mortgages are not needed until after a building is registered and will be for approximately the remaining 80% of the purchase price owed by the purchaser. Banks currently only want to grant mortgages to units above 500 sq. feet. Therefore, it will be some time before the bank’s willingness to mortgage a property under this benchmark is determined.

So all of these stats beg the question: “Would purchasing a micro condo be a good investment?”

Well, not to be too oblique, but it depends on your willingness to risk. Frankly, as a real estate representative it is incumbent upon me to suggest that the purchase of any real estate is a risk. I personally own a house in Toronto and am not a big risk taker so obviously I don’t feel buying real estate too risky in this city. But, I own a detached home and not a condo.

I consider any condo purchase a riskier purchase than a house simply because there is only so much land available in the city of Toronto for individual houses and therefore, the demand for houses far exceeds supply. There are far more condos available for sale than houses. I do however, recognize that buying a house instead of a condo is not possible for everyone (as an aside, I purchased my house with a friend and duplexed it in order to afford what I wanted). As well, I know that many want to live right downtown and love the lifestyle a condo offers.

So, here is my own personal opinion offered in the hopes of offending few. I love tiny houses. I love the clever design but if investment was part of my plan a micro condo would not be my first choice. I don’t feel that I need to spend that much more for good design and I’m confident I could outfit my micro condo with multi-functional furnishings myself and not pay extra for someone else to do it for me.

There are, nevertheless, many who find value in what Smart House has to offer and they will be willing to pay for it and I think, providing the fees are kept down, there will be people wanting to buy them on resale and rent them as well. I think it is important to understand that they are being marketed as small luxury living and not affordable living.

I would not be put off by fear of the banks. I think the banks will offer mortgages on these units for two reasons: they will become more prevalent and the banks won’t want to miss out on the opportunity to make money. In fact, banks still don’t want to give people mortgages on co-ops either but a mortgage can be had at competitive rates on co-ops going the credit union route. If the banks won’t step up, I think someone else will.

What would really interest me are micro condos like those planned for Surrey B.C. where a 316 square foot “studio” will sell for less than six figures. Granted we aren’t Surrey B.C. but my point remains the same. Instead of luxury micro condos at over $800 per square foot, I’d like to see them under the average price per square foot but I doubt we will see anything like this in the downtown core.

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