According to a recent study by the Ryerson City Building Institute, housing in Toronto neighbourhoods may not be able to sustain an aging millennial population.
Currently, there are over 100,000 condominium apartments in development, the highest on record. While over the past decade, the GTA saw a decrease in the number of “up-sizers” — residents wanting to improve or upgrade their living situation — this trend is set to reverse in the coming decade as millennials move into the 34 to 45 age bracket.
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The population of those between the ages of 35 to 44 is expected to increase by over 200,000 come 2026, likely driving a need for larger, more family-friendly housing.
With the average first-time home buyer being 36 years old, these numbers suggest that there isn’t enough family-friendly housing underway in the GTA to meet the coming demand.
Lou Berkovits, AM640’s Real Estate Expert and host of Real Estate S.O.S, told AM640 host Tasha Kheiriddin Tuesday that the lack of family-friendly condos may end up being an issue in the industry.
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“There are a lot of people, not just a few thousand, but in fact hundreds of thousands of people that need family-friendly condos and we don’t have them,” he said.
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While older condos can be larger, and therefore better able to accommodate families, newer units have been scaled back in size as prices have risen.
In addition to a look towards one-bedroom units, the price gap between detached houses and condo apartments has tripled since 2007 from $200,000 to $600,000. Therefore, young families will increasingly turn to condominiums, creating a need for multi-bedroom units. Specifically, the cost of three-bedroom units have an average resale price of over $900,000.
“It’s not that these larger units don’t exist, the challenge now is because real estate prices have gone up so high, and with condominiums, we typically look at square footage prices, a unit that’s a 1,000, 1,100 square feet is going to be quite expensive. In most cases well over a million dollars.”
“It’s not that it’s not available, it’s in most cases not affordable.”
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Furthermore, the report states that if the current construction trends are not shifted towards the needs of the GTA’s changing demographics, the proportion of family-friendly housing located near amenities such as transit, school and services will decline, and affordability will continue to erode.
“This increasing demand for family-sized units means that young families will have to ‘drive to qualify’ for any type of unit, not just detached housing,” states the report.
The study went on to state that while these housing needs are being felt across the GTA, the need for family-friendly housing is strongest in the 416 region. To address these issues, the report suggests building more multi-bedroom units and constructing more buildings under six stories, which have been dubbed by researchers as “the missing middle.”
The report was entitled “Bedrooms in the Sky: Is Toronto Building the Right Condo Supply?” and was compiled in a partnership between the Ryerson City Building Institute and real estate consulting firm Urbanation.
With a file from Kerri Breen.
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