Toronto's condos are so unliveable that The New York Times is talking about them
Toronto’s real estate market is frustrating for countless reasons, from its unjustifiably high prices to the level at which it is dominated by investors — investors who have had such an impact on the city’s landscape that even the New York Times is writing about it.
As the lauded outlet reported this week, developers are now building (or not building) homes with this demographic in mind above all others, with condos seen as commodities rather than homes and designed more for renting short-term or to be flipped for a quick profit post-construction rather than to actually be lived in.
These condos exist due to the “greed” and profit motives of the developers and their investor buyers. They would not exist, at least in terms of total GFA, units and height under any other tenure type. pic.twitter.com/rUBcBNhzmG
— TUC Podcast Host 🐂✒️ / RE Analyst (@benmyers29) October 6, 2024
One indication of this is the fact that units are getting smaller, with increasingly more of them under 600 square feet. According to the StatCan data that spurred the NYT‘s coverage, the average size of a condo built post-2016 in the city is only 640 square feet, while those built before then average around 950 square feet.
And, while smaller places were “previously seen as an affordable entry point for real estate ownership among first-time buyers,” as the article states, they are now more likely to be snapped up by investors than any other unit type in the city — 64% of homes of this size are now investor-owned, versus 39% of condos generally.
No idea how city gives permission to sell just a washroom for 500K
— Nature’s Care Giver 🌱 (@HolyTree27) March 13, 2024
The heavy influence of investor interests can also be seen in the fact that tens of thousands of units have been put on ice amid a population surge and a housing crisis, all because this once-eager and guaranteed buyer segment has backed off the market in recent months.
“The nature of condo financing has inflated the influence of investors as buyers,” the paper points out.
“Lenders generally don’t advance any money to condo developers for construction until they presell about 70% of the units in any new building. Investors who aren’t going to live in a property are an easier market for such pre-construction sales than people who intend to make it their home and most likely need a firm timetable for its availability.”
With fewer of these players in the game and condo sales numbers hitting a 27-year-low over the summer as a result, some 24,000 units in progress are now in limbo. These are units that many locals would have been happy to move into, had they been able to afford the still-too-high price tag in this economy, along with the lack of surety that comes with early pre-con down payments.
Had they come to fruition, these units also likely would have been smaller on average, less family-friendly and with less liveable layouts and features than older buildings, as is typical of new complexes in the region.
Two decades ago condos and rentals were designed and built as places for people to live. Now they’re designed and built to be investments for people who will never actually live there.
Squeezing in a tenant at overinflated rent is just an afterthought.
— Spencer Sandor (@SpencerSandor) June 2, 2022
Other Toronto issues that have reached enough of a pitch for the New York Times to touch on them include the vehement public opposition to the Ontario Place revitalization project and our horrendous auto theft statistics.