Andrew la Fleur likes to boast that he owns the smallest condo in Toronto right now — a 301 square foot studio in the Regent Park redevelopment.
But he knows his bragging days are numbered.
Slated to open in spring 2013 is the newest small thing to hit Toronto’s exploding condominium market — a 270 square foot studio in Canderel Residential’s DNA project on King St. W.
“We may be reaching a breaking point,” says la Fleur, 31, looking around his tasteful but tiny condo he bought for $166,000 in the pre-construction phase a year ago and plans to rent out for $1,000 a month.
“It’s hard to know how the market is going to respond to super small condos. Hundreds of them exist on (blueprint) paper right now, but very few of them have actually been built yet. They have never existed in Toronto before.”
La Fleur’s bright, 12th floor unit stretches to a relatively palatial 389 square feet if you factor in the balcony and don’t mind having your dinner parties outdoors.
It feels like a hotel room — although even they average 350 square feet — except for the dark laminate flooring and chic granite-clad kitchen. It’s closet-space challenged: There’s a stacked washer and dryer where you would expect to hang your clothes.
Call the place small, but “very functional,” says la Fleur, a downtown realtor. Just don’t call it a micro-condo, he says, the new buzzword in hot housing markets like London and Manhattan.
While Toronto has a ways to go to rival Tokyo where folks cram themselves into “capsules” as little as 96 square feet, these studios are a sign of the times.
In the past three years alone, unit sizes have dropped significantly, especially in the downtown area, as developers look to keep prices affordable — but profitable — in the face of the HST, as well as escalating land and building costs.
Ten years ago the average condo in the Greater Toronto Area was just over 1,000 square feet. By this spring, it had shrunk to 921 square feet, says condo research firm Urbanation.
Downtown, the average new unit is just 749 square feet.
At the same time, developers are trying to ease the optics of escalating prices by cramming two bedrooms into roughly the same footprint that used to have just one. That means everything — from kitchens to sleeping space — are getting tighter.
Blame the HST, escalating land costs and the increased costs of building, says Riz Dhanji, vice-president of sales and marketing for Canderel, which has a novel distinction in the Toronto condo market right now.
It is building both the smallest condo — two 270 square foot studios on King St. W. — and the biggest, the 11,370 square foot penthouse in its Aura development at College and Yonge Sts.
“We’re turning into a New York kind of city where units are getting smaller and the prices are getting more expensive,” he acknowledges. “It’s not that developers don’t want to build bigger units, it’s that people don’t want to pay the price.”
Builders warned the province that smaller units would be an inevitable outcome of adding the HST to new condo construction, Dhanji says.
In response, the Ontario government introduced the Ontario Enhanced New Housing rebate, which means the HST only applies to the portion of new condo sales above $400,000.
That has left developers struggling to keep as many condos as possible under $400,000, for fear buyers will turn to the resale market where the same tax doesn’t apply, Dhanji says.
The effect is now being felt as the first of those condos come on the market.
From 2008 to the end of 2010, the percentage of new one-bedroom condos in the GTA jumped to 58.6 per cent from 51.5 per cent while two bedrooms dropped to 32.8 per cent from 41.4 per cent, says Ben Myers, executive vice-president of Urbanation.
La Fleur is already happy with his little investment. A new one is for sale nearby for $200,000.
Its location close to transit, shopping and the bustling downtown office towers will make it perfect for a student or young professional. Not so much for empty nesting baby boomers.
“Downsizers can’t wrap their heads around anything less than 800 square feet. Their universal reaction is: ‘How can people live like this?’ I have closets that are bigger.”