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.

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 that date 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 reads, they are now more likely to be snapped up by investors than any other unit type in the city — 64 per cent of homes of this size are now investor-owned, versus 39 per cent of condos generally.

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 percent 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 — 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 likely would have been smaller on average, less family-friendly and with less liveable layouts and features than older buildings.