Financing for condos smaller than the 400 sq. ft. was once a pipe dream, leaving too many investors shut out of an increasing number of opportunities in Canada's lucrative condo rental market. Lenders are adapting, but why are investors still hesitant. CREW investigates.
Video transcript below:
Reporter: Smaller is better or so they say, but does that apply to condos? Is micro the new form in condo dwelling? We find out in this week’s episode of Investor Insight on Crew TV.
Micro condos are a new trend in Canada, will they become the new norm? What works in Tokyo may not work in Toronto or can it?
Monika McMillan, Sales Representative, Bosley Real Estate
Monika McMillan: I think micro condos are starting to be popular. There are a few developments in Toronto and I think what is happening is in large cities such as New York, Tokyo, Hong Kong, those are just, they have been there for years. So that trend is now starting to arrive in Toronto with our high population and growing number of young professionals moving back into downtown Toronto. I think you do have to be careful in terms of the layouts, there are a few of them marketed as 400 sq.ft., 300 sq.ft., you do have to look at the layout. At the end of the day, design and functionality is everything. So always do your research to make sure that the price is right, but they are popular and people are asking whether it’s renters or investors they are asking for smaller units - downtown Toronto.
Reporter: Condo sizes have been shrinking for years, so why the big concern over micro condos?
Erica Smith, Broker of Record, Co-founder of Condo Chicks
Erica Smith: I think there is a lot of concern regarding the micro condos, some that we see in the media and such forth. I am not so concerned about it because what people have to understand is because land values have increased so much in Toronto in the past 4 to 5 years, the micro condos which are typically I would say about 500 sq.ft. and smaller which is actually quite large compared to the average square foot of condos in say New York and Tokyo are entry level condos for people, so it’s more affordable for first time home buyers. The average square foot for condos in Toronto I think 10 years ago was well over a 1000 sq.ft. and now it’s about 735 sq.ft.