Maggie Hildebrand's first apartment in Toronto had a kitchen, a dining table, a workspace and a bed – all in the same 300-square-foot room. It was a decent home at first, close enough to her job downtown and with all the bare necessities for daily living. But it didn't take long for the 28-year-old to feel boxed-in. It was so isolating in that tiny space, she told the BBC. It definitely feels like it's just somewhere to put worker bees during the night.
Ms Hildebrand lived in one of the city's micro-condos, a once rare sight in Canadian real estate that has become ubiquitous in the last decade thanks to fast-growing, high-rise developments in major cities like Toronto and Vancouver. But as Canada's condo market sinks to lows not seen in decades due to a series of market pressures, the value of these micro units is cratering faster than any others.
The condo market is experiencing a downturn not seen since the 1980s, with thousands of move-in-ready units sitting empty and unsold across Toronto and its surrounding regions. Over the last year, an unprecedented 18 condo projects were cancelled in the city, with experts expecting that number will grow as demand continues to plummet.
The downturn has reignited debate over whether developers catered too much to real estate investors by building smaller, more affordable units. Investors own the majority of condos under 600 square feet in Toronto, and the construction of these small units skyrocketed in 2016, now making up 38% of condos built in the city.
With so much inventory on the market in Canada, some micro-condos that had sold for half a million dollars a few years ago are now reselling for C$300,000 or less, which was unthinkable in a city known for its unaffordability. It's a race to the bottom getting these things sold, said Shaun Hildebrand, president of Urbanation.
The slump is not unique to Toronto, with Vancouver experiencing a similar downturn. Experts attribute this, in part, to an overabundant supply and a demographic shift affecting demand due to new immigration caps. As anxiety grows over interest rates, many investors are forced to sell at a loss due to diminished market confidence following a record-high building spree.
However, there is a silver lining for renters like Ms Hildebrand, who now have more options and better deals due to the increased supply. She has moved to a larger apartment for just a little more in rent, citing a significant improvement in her quality of life.
The housing crash is transforming who developers will target moving forward, shifting focus from short-term investors to those looking for long-term homes. While immediate benefits may be felt by some renters and buyers, questions remain about the long-term implications for Canada's housing supply.
Ms Hildebrand lived in one of the city's micro-condos, a once rare sight in Canadian real estate that has become ubiquitous in the last decade thanks to fast-growing, high-rise developments in major cities like Toronto and Vancouver. But as Canada's condo market sinks to lows not seen in decades due to a series of market pressures, the value of these micro units is cratering faster than any others.
The condo market is experiencing a downturn not seen since the 1980s, with thousands of move-in-ready units sitting empty and unsold across Toronto and its surrounding regions. Over the last year, an unprecedented 18 condo projects were cancelled in the city, with experts expecting that number will grow as demand continues to plummet.
The downturn has reignited debate over whether developers catered too much to real estate investors by building smaller, more affordable units. Investors own the majority of condos under 600 square feet in Toronto, and the construction of these small units skyrocketed in 2016, now making up 38% of condos built in the city.
With so much inventory on the market in Canada, some micro-condos that had sold for half a million dollars a few years ago are now reselling for C$300,000 or less, which was unthinkable in a city known for its unaffordability. It's a race to the bottom getting these things sold, said Shaun Hildebrand, president of Urbanation.
The slump is not unique to Toronto, with Vancouver experiencing a similar downturn. Experts attribute this, in part, to an overabundant supply and a demographic shift affecting demand due to new immigration caps. As anxiety grows over interest rates, many investors are forced to sell at a loss due to diminished market confidence following a record-high building spree.
However, there is a silver lining for renters like Ms Hildebrand, who now have more options and better deals due to the increased supply. She has moved to a larger apartment for just a little more in rent, citing a significant improvement in her quality of life.
The housing crash is transforming who developers will target moving forward, shifting focus from short-term investors to those looking for long-term homes. While immediate benefits may be felt by some renters and buyers, questions remain about the long-term implications for Canada's housing supply.
