Toronto condos and rentals are a whole lot smaller than they were two decades ago
Toronto condo and rental units have earned a reputation as concrete shoeboxes in the sky, increasingly tiny units challenging the use and functionality of homes as they rely more and more on amenity spaces and their surrounding neighbourhood to fulfil resident needs.
But it wasn't always like this, and there was a time when the average Toronto condo or apartment unit was actually pretty spacious, almost double the average unit sizes being leased in the 2020s.
One only has to look back to the late 1990s to see an average leased unit size of almost 1,000 square feet, which is a palace by today's standards for multi-residential buildings, the average leased unit measuring at just under 600 square feet by 2022.
The median size of condo and rental apartments for lease in the GTA by the year the building completed (past 40 months of @torentals listings data).— Big Ben Myers 🐂✒️ (@benmyers29) June 1, 2022
Median size for buildings completed in 1998: 979 sf
Median size for buildings completed in 2022: 596 sf#ToRE pic.twitter.com/xGrERkQdSu
Ben Myers, President of Bullpen Consulting, tells blogTO that "affordability is getting worse and the only way to keep end-selling prices reasonable is to shrink the average unit size and increase revenue per-square-foot instead."
"Developer costs are skyrocketing due to the cost of materials and supply-chain issues, record sales and buildings under construction pushing up labour costs, and the City of Toronto is increasing development charges."
Myers notes that while people often complain about suite sizes being built, the large units that are put on the market pre-construction "often sit unsold for years, often only selling when the building is complete."
"Developers need to sell at least 70 per cent of the project revenue to secure financing to build, so they have to offer suites that will sell during the early pre-construction process."
Data shows a gradual decline in all median unit sizes from 2018 to April 2022, indicating that it's not just a case of packing in more studio and one-bedroom units into developments to hit that 70 per cent sales mark, but a shrinking of all unit types.
It could be considered another case of shrinkflation, a term for products shrinking while retaining their full-sized price, and something that actor BJ Novak has been warning us about since the mid-2000s.
I wrote about that already! https://t.co/RpNAFOOaAB— Big Ben Myers 🐂✒️ (@benmyers29) June 2, 2022
So when the next new development launches with impossibly small units, just remember that the market can only respond to demand, and if buyers (read investors) want tiny units, that's what developers are going to build.
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