Over the past week I’ve had 2 separate people ask me my thoughts on the future of the condo market in Toronto. One of them was working on a University study and one of them was trying to figure out what (condo) property managers would look like in the future. 

To be clear, the questions weren’t motivated by the typical “bubble” debate that the media loves to headline, rather these were questions about the long term future of condos in this city.

I haven’t written about this topic explicitly, so today I thought I would summarize my responses for the Architect This City community. There’s probably a touch of aspiration in the responses I gave, but it’s more or less what I’m thinking and what I believe has a good chance of happening over the next 10-20 years.

Here are some of my thoughts (not an exhaustive list):

Intensification is going to continue in Toronto and that is going to mean more condominiums and other types of multi-family dwellings. Rental apartments is the product type du jour right now within the real estate community.

As intensification continues, I think we’re going to see a tipping point in the near term with more families opting to have and raise children in condos in the city. Part of this will be driven by a desire to stay in the city (walkable communities), but part of it will also be driven by the economics (i.e. high price) of low-rise housing in the city.

As families begin to fill in condos (not just young single professionals and empty nesters), we’ll see developers and cities respond with more family friendly buildings, amenities, and program choices. This could mean anything from children’s play spaces within buildings to redesigned public spaces and parks.

In line with this shift, I think we’ll also see more sophisticated executions of “mixed-use.” Rather than just stacked uses (retail at the bottom, a few levels of office, and a residential condo tower above), developers and operators are going to start thinking about the ecosystem they are creating. (Related discussion in the comment section of this post.)

It’s probably a bit safe to predict that sustainability will become more important going forward. But I think that as more families and long-term end users opt for condos, that consumers will become more interested in building and energy performance. Technological advancement (both hardware and software) will also give this a boost.

Finally, and this applies somewhat to real estate in general, I believe that we’ll see a lot more openness and transparency all across the industry. There will be much better access to data and information. Similar to above, this will be aided by advances in technology and networks.

Now it’s your turn. What do you think of the above list? And what will the condo market — either in Toronto or in your city — look like in 10-20 years?

I live in a condominium in the St. Lawrence Market neighborhood of Toronto. And recently, I’ve had a number of “empty nesters” ask me if they could come check out my condo and get a feel for what it’s like to live in a downtown neighborhood like the Market.

And they’re asking because they’re contemplating something that has become quite common for folks whose kids have left the roost. They’re considering, for a number of reasons, selling their suburban home and right-sizing to a downtown condominium.

Whether it’s because they want to free themselves of cutting grass and shoveling snow, they don’t like stairs anymore, they want to be able to lock the door and head to Florida for the winter, or they want an amenity rich urban lifestyle, the uptake on condos has been significant both in Toronto and other cities around the world.

Indeed, the condo market has become great at serving “both ends” of the market: first time buyers/young professionals and empty nesters. But what I wonder is if we might be at a tipping point with respect to the middle segment of the market: families.

The average new construction low-rise home in the Greater Toronto Area is roughly $650,000 right now. But this would be more for houses in the center of the city. There, you’re probably looking at anywhere from $650,000 to $1 million for a “typical” 3 bedroom Toronto house.

By comparison, a new condominium might average somewhere between $550 and $600 per square foot in the city. So for a 3 bedroom condo at, say, 1,300 square feet, you’d be looking at somewhere between $715,000 and $780,000. Add in parking and you’re somewhere between the mid $700,000’s and just over $800,000.

In all cases, we’re talking a lot of money. But the point I’m trying to make is that condominiums and houses are becoming cost competitive. There are obviously differences between both housing types, but if your goal is a 3 bedroom place to raise a family, that utility could be met in both cases.

There may still be psychological/societal barriers to raising kids in a condo, but I wonder if we might be close to a tipping point now that the economics are starting to line up. What do you all think?

Over the past week I’ve had 2 separate people ask me my thoughts on the future of the condo market in Toronto. One of them was working on a University study and one of them was trying to figure out what (condo) property managers would look like in the future. 

To be clear, the questions weren’t motivated by the typical “bubble” debate that the media loves to headline, rather these were questions about the long term future of condos in this city.

I haven’t written about this topic explicitly, so today I thought I would summarize my responses for the Architect This City community. There’s probably a touch of aspiration in the responses I gave, but it’s more or less what I’m thinking and what I believe has a good chance of happening over the next 10-20 years.

Here are some of my thoughts (not an exhaustive list):

Intensification is going to continue in Toronto and that is going to mean more condominiums and other types of multi-family dwellings. Rental apartments is the product type du jour right now within the real estate community.

As intensification continues, I think we’re going to see a tipping point in the near term with more families opting to have and raise children in condos in the city. Part of this will be driven by a desire to stay in the city (walkable communities), but part of it will also be driven by the economics (i.e. high price) of low-rise housing in the city.

As families begin to fill in condos (not just young single professionals and empty nesters), we’ll see developers and cities respond with more family friendly buildings, amenities, and program choices. This could mean anything from children’s play spaces within buildings to redesigned public spaces and parks.

In line with this shift, I think we’ll also see more sophisticated executions of “mixed-use.” Rather than just stacked uses (retail at the bottom, a few levels of office, and a residential condo tower above), developers and operators are going to start thinking about the ecosystem they are creating. (Related discussion in the comment section of this post.)

It’s probably a bit safe to predict that sustainability will become more important going forward. But I think that as more families and long-term end users opt for condos, that consumers will become more interested in building and energy performance. Technological advancement (both hardware and software) will also give this a boost.

Finally, and this applies somewhat to real estate in general, I believe that we’ll see a lot more openness and transparency all across the industry. There will be much better access to data and information. Similar to above, this will be aided by advances in technology and networks.

Now it’s your turn. What do you think of the above list? And what will the condo market — either in Toronto or in your city — look like in 10-20 years?

I live in a condominium in the St. Lawrence Market neighborhood of Toronto. And recently, I’ve had a number of “empty nesters” ask me if they could come check out my condo and get a feel for what it’s like to live in a downtown neighborhood like the Market.

And they’re asking because they’re contemplating something that has become quite common for folks whose kids have left the roost. They’re considering, for a number of reasons, selling their suburban home and right-sizing to a downtown condominium.

Whether it’s because they want to free themselves of cutting grass and shoveling snow, they don’t like stairs anymore, they want to be able to lock the door and head to Florida for the winter, or they want an amenity rich urban lifestyle, the uptake on condos has been significant both in Toronto and other cities around the world.

Indeed, the condo market has become great at serving “both ends” of the market: first time buyers/young professionals and empty nesters. But what I wonder is if we might be at a tipping point with respect to the middle segment of the market: families.

The average new construction low-rise home in the Greater Toronto Area is roughly $650,000 right now. But this would be more for houses in the center of the city. There, you’re probably looking at anywhere from $650,000 to $1 million for a “typical” 3 bedroom Toronto house.

By comparison, a new condominium might average somewhere between $550 and $600 per square foot in the city. So for a 3 bedroom condo at, say, 1,300 square feet, you’d be looking at somewhere between $715,000 and $780,000. Add in parking and you’re somewhere between the mid $700,000’s and just over $800,000.

In all cases, we’re talking a lot of money. But the point I’m trying to make is that condominiums and houses are becoming cost competitive. There are obviously differences between both housing types, but if your goal is a 3 bedroom place to raise a family, that utility could be met in both cases.

There may still be psychological/societal barriers to raising kids in a condo, but I wonder if we might be close to a tipping point now that the economics are starting to line up. What do you all think?