BY: SINEAD MULHERN
The micro condo seems to be Toronto’s answer to the tiny home movement that’s taking hold of rural-living spendthrifts. Construction of these mini units is accelerating.
A full five percent of new condos coming into the market this year will be miniature dwellings of 500 square feet or less. By the end of 2015, that will rise to 11 percent. The average size of a new unit that goes up in Toronto is 800 square feet.
The smallest occupied condo in the city right now is located in Regent Park. It is 300 square feet.
These little units, which some property agents prefer to call “studios”, are hot amongst real estate investors. They’re less money to buy, and single units are easy to lease to tenants. But micro condos are less popular among big banks in charge of giving mortgages. Scotiabank and TD are not likely to give out mortgages on units under 500 or 600 square feet. It’s not impossible though as mortgages are considered on a case-by-case basis.
But it’s a big “what if” when we’re talking 80 percent of a property price not covered by a buyers’ down deposit. RBC could be a safer bet; they mortgaged the Regent Park units.
As a Toronto Star article points out, while these units are cheaper overall, the rental rates per square foot are actually higher than larger units. One of these homes will cost you $3.34 per square foot versus $2.80 for the regular-sized counterparts. Looks like they’re in demand.
In fact, 80 percent of these types of properties at a 256-unit building called Smart House at Queen Street and University Avenue have sold already.
It certainly makes buying property a more reasonable option for Torontonians on smaller incomes too. A unit could go for under $250,000. And as the tiny home movement has shown, people do have an interest in clutter-free minimal living. Especially when it could mean the bank accounts will take less of a hit. Living small is not exactly revolutionary though. Some are comparing these units to similar-sized dwellings in Hong Kong.
We better get used to them. And maybe big banks will change their tune. Thousands more of these humble abodes are under planning in Toronto.
Curious about the micro condo? Check out this clip that takes you right inside.