Demand Soars for Ever-Larger Homes in the Sky

It’s a fact: in Canada’s urban centres, room to build is dwindling, especially in the scarce-as-hen’s-teeth detached housing sector. That’s why high-rise condo towers continue to be the face of new residential building. When we build up, not out, we’re able to provide more shelter for more people while using less of a footprint. But there’s a problem.

Up until now, condos have been viewed as the perfect living solution for young, single professionals or empty nesters looking for less space. But what happens when those young professionals start families, and require more room? The ubiquitous one-bedroom unit no longer cuts it.

Larger units in demand

The need for condo units that can accommodate families is growing, and condo developers are responding. As the Financial Post reports, two-bedroom-plus-den units made up 29 per cent of sales in the second quarter of 2016, up from 18 per cent in 2011. In the article, Shaun Hildebrand, senior vice president at research company Urbanation, notes: “New condos have seen rising demand, which is leading developers to shift strategies and include more two-bedroom and three-bedroom units.”

If these bigger units are built in higher numbers, they could be the most sought-after form of housing in Canada’s biggest cities, partly due to the recently implemented “stress test” that has made it more difficult for first-time buyers to access the financing they need to purchase. With detached housing far out of reach for most of these buyers, three-bedroom homes in the sky could be the new normal.

Location, Location … the Good, Bad and Ugly

We all know that living near a good school increases the value of your home. But who knew a neighbouring cemetery can adversely affect your property value? Or that proximity to a hospital isn’t a good thing? In fact, we now know – or should know – that nothing is more important when selling your home than your neighbourhood. So if you’re buying, think ahead; purchase your dream home in the wrong location and you may be buying into a nightmare. Here are some location no-nos:

  • Condo.ca has found that living near a cemetery will lower your property value by 12.3 per cent. Having a hospital nearby means a negative impact on your sale price of 3.2 per cent. And make sure you move near a “good” school; a “bad” school will reduce your home’s value by 22.2 per cent.
  • An article in the Journal of Transport Economics and Policy indicates that having an airport nearby can discount the value of your home; the more noise, the greater the discount.

Among the amenities to look for:

  • Access to highways. Canada-based Real Estate Investment Network (REIN) concluded from study results that “as highway networks are created and existing corridors to the CBD (Central Business District) are improved, the value of real estate in the area increases.”
  • But proximity to transit is important too. In a recent article inwhichmortgage.ca, Site Economics analyst Richard Wonzy says, “Closeness to transit options is of great benefit, increas(ing) existing house prices perhaps 10 per cent to 15 per cent.”
  • A neighbourhood on its way up – not down. In transitional neighbourhoods, you get a lot of value for your home-buying buck. Your real estate agent is the best source of information on which direction your neighbourhood is trending.
  • Water, parks and green spaces. A nearby waterfront can add up to 25 per cent to the value of your home. A fabulous view is also a money-maker when it comes time to sell.