It’s no secret condo units in some of Canada’s most expensive markets have been getting smaller over the years.
It’s one way developers have been able to keep price points low enough to sell the units needed to finance and complete projects in Canada’s urban centres, where land values have skyrocketed to the point that condos have become starter homes.
New data appear to confirm this trend for the Toronto and Vancouver census metro areas. But it also highlights a key regional difference: Toronto’s condos are shrinking twice as fast as Vancouver’s, and government policy might have something to do with it.
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The median size of a Toronto condo built between 2016–2017 was 650 square feet, compared to 770 square feet in Vancouver, according to the Canada Mortgage and Housing Corporation, which analyzed new Canadian Housing Statistics Program data from Statistics Canada as part of a partnership between the two.
For the same kind of unit built from 1981 to 1990, the median size in Toronto was 1,070 square feet, versus 915 in Vancouver.
By that measure, Toronto condos have shrunk by nearly 40 percent then, while Vancouver units are about 16 percent smaller.
The downward trend in unit size is even more dramatic in urban cores, especially the cities of Toronto and Vancouver, as well as Surrey, BC, and Mississauga, ON, says CMHC.
Until the year 2000, Toronto area condos were consistently larger than their counterparts on the west coast, CMHC notes. So what happened?
“This coincides with the introduction of the Ontario greenbelt policy in 2005,” CMHC says.
The Places to Grow Act of 2005 is legislation that protected 7,200 square kilometres of natural land and farm fields in Southern Ontario’s Greater Golden Horseshoe from development.
CMHC touches on other factors behind the sky high land prices in these expensive markets, which are seeing homes get smaller and smaller as a result.
“Well, immigration and income growth have increased housing demand in Toronto and Vancouver.”
“These thriving housing markets have encouraged investors wanting to buy condominium apartments but these units tend to be smaller, consistent with economic performance or higher returns,” CMHC explains.