I gave a talk about condos this evening at the Ted Rogers School of Management. For regular readers of this blog, the material wouldn’t have been all that new. I talked about supply and demand in housing markets and 2 of the projects that TAS is working on. The best part though was the Q&A, which, I think, was longer than the actual talk.
One question that I particularly liked (maybe because I’ve blogged about it before) was the question of what all these Generation Y condo dwellers are going to do when they decide they want a family. We know that people are getting married later and that more people are living alone. So there are some demographic changes at work here. But people are still going to have kids and people are still going to need more space.
At that point, I think 2 other, interrelated, factors come into play: first, a lot of people still feel you need a house in order to raise kids; and, second, there’s a problem of affordability. Multi-family dwellings (built out of reinforced concrete) are inherently more expensive to build than wood-framed single family homes.
I gave a talk about condos this evening at the Ted Rogers School of Management. For regular readers of this blog, the material wouldn’t have been all that new. I talked about supply and demand in housing markets and 2 of the projects that TAS is working on. The best part though was the Q&A, which, I think, was longer than the actual talk.
One question that I particularly liked (maybe because I’ve blogged about it before) was the question of what all these Generation Y condo dwellers are going to do when they decide they want a family. We know that people are getting married later and that more people are living alone. So there are some demographic changes at work here. But people are still going to have kids and people are still going to need more space.
At that point, I think 2 other, interrelated, factors come into play: first, a lot of people still feel you need a house in order to raise kids; and, second, there’s a problem of affordability. Multi-family dwellings (built out of reinforced concrete) are inherently more expensive to build than wood-framed single family homes.
To deal with these factors, a lot of young couples in Toronto (at least from my own empirical research) seem to be looking to inner city neighborhoods like Leslieville, Roncesvalles, Trinity Bellwoods, High Park, the Junction and so on. They still want to be in the city, but they want a house, for their kids. Problem is, everybody is trying to do the same and it’s creating tremendous pressure on our low-rise housing stock.
So what’s going to happen in the longer term?
Well if low-rise housing keeps appreciating at the rate it has been, we could reach a point, I think, where all of a sudden condos become the more cost effective solution.
For example, let’s say a young family is looking for a 3 bedroom home. It’s not inconceivable that the 1,500 square foot, 3 bedroom condo could become the cheaper option. At $650 per square foot (I’m assuming a slightly higher number because I’m assuming this is at some point in the future), you’re looking at roughly a million dollars. No question this is a lot of money, but what if the alternative (a single family home) is $1.5 million?
I’m sure there will always be a segment of the market that rushes towards the suburbs and/or a house when they decide they want to have kids. But I think we’ll see more and more families decide–either because of cost or because of a lifestyle preference–that having children in a condo isn’t all that bad.
What do you think? Would you ever raise children in a condo?
To deal with these factors, a lot of young couples in Toronto (at least from my own empirical research) seem to be looking to inner city neighborhoods like Leslieville, Roncesvalles, Trinity Bellwoods, High Park, the Junction and so on. They still want to be in the city, but they want a house, for their kids. Problem is, everybody is trying to do the same and it’s creating tremendous pressure on our low-rise housing stock.
So what’s going to happen in the longer term?
Well if low-rise housing keeps appreciating at the rate it has been, we could reach a point, I think, where all of a sudden condos become the more cost effective solution.
For example, let’s say a young family is looking for a 3 bedroom home. It’s not inconceivable that the 1,500 square foot, 3 bedroom condo could become the cheaper option. At $650 per square foot (I’m assuming a slightly higher number because I’m assuming this is at some point in the future), you’re looking at roughly a million dollars. No question this is a lot of money, but what if the alternative (a single family home) is $1.5 million?
I’m sure there will always be a segment of the market that rushes towards the suburbs and/or a house when they decide they want to have kids. But I think we’ll see more and more families decide–either because of cost or because of a lifestyle preference–that having children in a condo isn’t all that bad.
What do you think? Would you ever raise children in a condo?
