Micro-Condos: Wave of the Future?
Canada is new to the micro-condo scene. Land rich and resources aplenty, most people have never seen a real need to make their living quarters minute. But the real estate market is booming and and people are looking for new ways to cut costs.
Toronto and Vancouver, renowned for their soaring property prices, were the first to wade into the micro condo waters.Vancouver saw its first pint-sized project six years ago when developer John Stovell converted a defunct single-room occupancy building into the “Burns Block” micro-loft rental property located in the heart of Gastown.
Toronto has over 3,000 micro-condos in various stages of construction and is betting on budget-conscious young people who want to be at the centre of it all. Easy access to affordable conveniences like parks, libraries, and public transportation make downtown living attractive to young professionals..
“They don’t mind trading space for living in a place where they want to be. So they will choose to have a 300-square-foot home if it can be in a place they want to live,” says Stovell.
But buyers beware, banks are leery to lend mortgage money on such miniscule properties. Micro-condos are relatively new and nobody has tested the market. Banks worry that buyers will want to sell quickly, reasoning long term residence is not a likely outcome.
Reasonable rental and property insurance rates might be harder to secure as well. Insurance companies have concerns about shoddy condo construction and have been upping premiums to compensate. Customers are advised to do their research ahead of time to guarantee an affordable home insurance rate.
As housing prices climb, buyers will look for sensibly priced solutions and micro-condos provide that for people. Whether they are here to stay is still a mystery but the forecast is looking good.
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