Wednesday, February 8, 2012
2011 Canada census: Young professionals, baby boomers fuelling Canada’s condo boom
Four decades later, the retired couple is part of the condo craze — lured by the promise of a life free of clearing snow and scooping out eavestroughs, drawn to the gleaming glass-and-steel towers and newly scrubbed factory conversions that are reshaping Canada’s urban lifestyle.
After years of living in cramped apartments in New York City, the Weisses craved space — enough to hold a few kids without forcing anyone to share a room, as they had in their childhood.
“We really longed for a house,” and scrimped and saved for a down payment, Debrah Weiss said. “While the kids were growing up, I never would have considered an apartment.”
So the family traded up to bigger and bigger houses until, five years ago — their daughter and son long moved out — the pair, then in their 60s, decided to pack it all in for a spacious condo just blocks away from their home in the burgeoning east Toronto neighbourhood of Riverdale.
The garden they loved was getting harder to maintain and climbing steep stairs to the third-floor bedroom was getting increasingly tricky, said Weiss, 71.
Their not-yet-built condo promised a view of the Don Valley, a guest room for visiting relatives, two separate work spaces, a customized kitchen with a full-size pantry and a wine fridge — and no shovelling snow in the winter.
After their move in 2010, “I wasn’t longing for the house,” Weiss said.
Experts say fundamental shifts in population and lifestyle — couples putting off marriage and children, workers rebelling against tiresome, traffic-clogged commutes — are pairing with a growing backlash against urban sprawl to spur one of the most pronounced and sustained real-estate booms in recent history.
That explosion is, in turn, changing the shape and culture of Canada’s cities.
“It’s a combination of economic and demographic factors,” said Adrienne Warren, senior economist and manager with Scotiabank.
Condos present a more affordable option for first-time home buyers such as young adults and new immigrants, she said — two groups naturally drawn to the buzz of big cities.
Empty-nesters looking to downsize to a smaller home are also driving the condo craze, but for lifestyle reasons more than financial ones, Warren added.
Meanwhile, demand for land is pushing developers to build vertically rather than horizontally, encouraged by government policies designed to curb sprawl.
As a result, multi-unit dwellings — a category that includes condominiums — now make up roughly half of all new housing stock, where detached homes traditionally led the way.
“It’s a big shift that we’ve seen over the last several decades,” Warren said — one likely to hold up over the long term as the population ages and land grows even more scarce.
At the time of the last census in 2006, close to 11 per cent of homeowners lived in condos, up from just over three per cent in 1981. Comparable numbers from the 2011 census won’t be released until September, but it’s clear from population figures released Wednesday that Canadians are re-populating Canada’s cities.
In Toronto, population increases of more than 17 per cent over the previous census period were apparent in the downtown core along the shore of Lake Ontario, where a gleaming crop of highrise towers seems to multiply on an almost monthly basis. A similar phenomenon is apparent in Vancouver.
Recent years have also seen an outcropping of billboards touting sleek, modern condos in cities not previously known for city-centre lifestyles, such as Ottawa, Calgary and Edmonton, although the suburban growth long a hallmark of prairie cities remains a dominant trend.
Some have tried to contain the boom. In Vancouver, officials capped condo developments to preserve downtown office space. Councillors in Ottawa last fall questioned the city’s ability to boost services to match the influx of condo-dwellers.
Meanwhile, some analysts fear the number of highrises could bog down the market with a glut of unsold condos if the economy took a turn for the worse.
“The risk is that if demand were to weaken sharply and unexpectedly, then builders would be left with this backlog of housing,” Warren said.
“So I’d say there is more risk in terms of pricing in the condo market than there is in other areas ... but as long as demand holds up reasonably firm, I don’t expect that we’d see a sharp correction down the road.”
Eventually — say, over the course of the next decade — any oversupply would be absorbed, she added.
Buying an investment property wasn’t on Chris Buyze’s mind when he signed the papers for his 58 square-metre studio on the edge of downtown Edmonton.
“It was a place I wanted to be, it was something I could afford ... I wanted to be close to amenities,” including the city’s light rail transit network, he said.
Buyze was 20 when he purchased the loft in a three-storey converted warehouse in 1999. The neighbourhood, which was deserted after business hours, was considered a rough one.
“When I moved downtown, people thought I was crazy,” said Buyze, now head of the Downtown Edmonton Community League.
Since then, hip lowrise walkups and shiny towers have multiplied near his home just blocks from bustling 104th Street, bringing with them a wave of coffee shops, bakeries, restaurants and bars.
“There’s suddenly an after-hours nightlife and attention to downtown that there wasn’t before,” which attracts more people, he said.
As more condos crop up and more people move in, the challenge will be to foster diversity within those fledgling communities, said David Gordon, an urban development expert at Queen’s University in Kingston.
Otherwise, some areas could become enclaves for young professionals and affluent retirees, shutting out families and lower-income residents, he said.
Buyze said planners in Edmonton are looking for developments with larger condos to draw families away from the suburbs.
“The challenge at this point ... is to provide the park spaces and the schools and the infrastructure that’s necessary,” he said. “If the schools aren’t open, those people aren’t going to move downtown.”