The dog crate condo glut is a good thing. That’s why prices have dropped and will continue to drop.
EnamelKant on
Did they ever have appeal beyond an investment?
scott_c86 on
“Investors own the majority of condos under 600 sq ft in Toronto, according to national database Statistics Canada”
This, as well as their high cost of construction, is the problem.
If these were reasonably affordable (ex. $200,000), they could definitely work for a lot of people, especially short-term.
McBuck2 on
They were never built to be lived in. They were built to be visited for a few days. We should work on a hybrid for hotels using them and cut the losses.
Head_Crash on
They’re speculative investments. People sign contracts to buy them at inflated prices before they’re built with the expectation that the value will be higher when the condo is complete and they take out the mortgage.
Problem is the value isn’t going up anymore, so when the condo is ready they’re now hundreds of thousands under water and the bank won’t finance it.
Maddog_Jets on
Because short term rentals aka Airbnb is being outlawed for use in residential.
porterbrown on
They aren’t long term homes.
ConsciousAsk8160 on
Who did they appeal to?????
sur_caneng on
You dont vant to live in ze pod? Eat ze bugz?
icecoffee888 on
They never had any appeal, Canadians were just out of options. Carney stopped Trudeau’s insane immigration scheme, so naturally prices went down.
DerpinyTheGame on
A walkin closet for the price of a house. Yeah no.
toilet_for_shrek on
They were advertised to investors as money-printers. Turns out real estate only grows infinitely if there is demand
Ravoss1 on
Who wants to raise a family in 600sqft? Sure if not given a choice we could all live in bunkbeds in rooming houses….
I have no idea how people are doing it. I have a great job and support my wife and hopefully a child in the future. I have no idea how anyone is doing that in under 1000sqft comfortably.
wjames0394 on
People don’t want to live in a shoebox.
BruceNorris482 on
Because they don’t even make any sense. They should be for single professionals to have an affordable option. Not 350-450k. At 200-250k people would be snatching these up.
Assimulate on
I don’t need a massive place. But we live in a big country with lots to do.
They are trying to build these micro condos everywhere. Where would you put a snowboard? A tent? Camping gear? Out of season clothes?
I don’t need luxury finishes and a tiny space. I need modest finishes, and something that lets me have a hobby and work and sleep and cook and eat.
Crazy-Gas3763 on
Lazy journalism strikes again. We have been talking about this for over a year now
Beepbeepboobop1 on
What do they mean “losing”? Aside from a very small (no pun intended) subset of people, they never had any appeal to begin with! People want to be able to *live*.
Acceptable_Mammoth23 on
They never had appeal. Nobody wants to live in those awkward tin cans.
Massive-Exercise4474 on
Think what you can do with 400 square feet for only 3k a month.
Wind_Best_1440 on
70,000$ product sold for 700,000$ with Condo fees and Mortgage fees that double the cost of most detached homes.
Literally designed to be between 300-500Sqft Micro concrete dog crates with most of the buyers on record for saying. “I didn’t buy this to live in, who would want to live in that?”
Where entire buildings were sold to Foreign capital outside of Canada, or sold to slum lords inside Canada who had AirBnB and Short term rental slumpires.
Where Investors were tricked by real estate people saying. “Buy this, and your retirement is set. Canada house prices only go up look at these 30 years where its been true! At the low cost of your current retirement savings.”
Gee, I wonder why no one wants to buy them.
Bonus points.
8-12 months of market product on the MLS right now, with no one interested. Double the market inventory is being held back by developers on what is called a “Shadow inventory” so realistically there is actually close to 2 years of inventory, but they don’t want to flood the market to drop prices. (Developers don’t pay empty homes tax on these units as they have not hit “Market” yet through the MLS.)
In 12 months we’ll have the first 5% rental stock coming online, in 12-24 months we’ll have another 10% rental stock coming online and 36-70 months we’ll have another 10% rental stock coming online.
This is how there hasn’t been no mass layoffs in construction and development even though no new “Housing starts” has happened in the last year. Yet everyone is employed and we’re still starting new projects.
All new projects and current large projects are purpose built rentals being built. The money to fund it is coming from CMHC and their no risk loans that cover 75-95% of the project. With a 5-25% downpayment from the developer. These purpose built rentals are being sold to pension funds at 50 year amortizations, which means they don’t need to make money through rents for the first 1-3 decades of construction. As assets they’ll be worth more then what it costs to make them in the long term.
The reason why most real estate people keep getting the market wrong, and why everyone keeps saying. “Built up demand has to come back.” Is because Canada hasn’t been in a situation where it had so much useless inventory selling for premium with so much rental stock coming online shortly.
This is the first time Canada has built serious numbers of purpose built rentals since 1970’s. Close to 60 years ago, since the making of purpose built rentals had ended when Canada ended the war homes building that started after WW2 and ended around the time of the 1970’s.
Anyone who says the market is fine and will make a turn around has 0 clue what they’re saying. Especially when Banks right now are hoarding 11X the amount of money they did for a down turn then they had just 2 years ago.
andreacanadian on
pfft listen up I do not want a million dollar mortgage on a 600 square foot box NO and now the developers who were building air b and bs are crying???? No, we do not live on top of one another beehive style.
Now what did you learn???
nashfrostedtips on
Here’s to real estate investors getting screwed, hopefully prices continue to collapse.
The market becoming better for regular people needing to buy or rent is always a good thing.
djkarts_ on
I can provide a perspective as a real estate developer. We build rental apartments. Most of them are 1000 sq fr, 3 bedrooms. My company was started two years ago and now we have 96 units together as a mini community of sustainable, family oriented apartments.
Global money (not foreign investors but think sovereign wealth funds from Saudi, UAE, Europe etc) was providing lot of liquidity because the returns into condo development were some of the best in the world. And Toronto is a world class city considered a stable asset.
When the prices dropped, the global institutional money turned off the tap. The global institutional money wanted fixed returns and maximizing unit count gave developers incentive to sell per unit to maximize profits. It’s a game that’s been working for last 30 years. Spanning almost 2-3 generations. That has come to a grinding halt.
Rental developers have a different incentive. We have to maximize rent. And right now 3 bedrooms are fetching the highest rents and renting out the fastest. This is how it should have always been. We build to run the building for next 30-40 years. Condos were built to make them condo corp problems.
Added bonus to condo downturn is that labour has gotten cheaper and good reputable companies are bidding our projects competitively. This makes rental projects more affordable. Helping us hit our numbers to get CMHC financing.
Low key feels like you’re carrying the weight of multi family construction industry as a rental developer. Condo permits are stalled completely and they were a big source of housing numbers in Toronto and Canada. There are many layoffs in construction. But it’s a chance for companies to trim the fat.
People think condos sitting empty means that there is no housing crisis. In fact the units that are being put on MLS for sale are no longer part of rental inventory. They artificially increase rental prices. And with the highest number of condo inventory being on the market for sale means those units are not being rented. Which means the rent will stay high. We are about to experience a massive spike in rents as a country especially in City of Tornto. Cities like Paris, Dubai, Honk Kong, Singapore all have high rents. Especially when converted to USD.
Euclidisthebomb on
They only ever had appeal in a squeezed market driven by a combination of greed and market imbalance between supply and demand in the GTA.
The reality is most of these modern condo buildings are shitboxes. Built with glass fascades that will barely make it 10 yrs and excessive condo fees where the external management company is making a nice chunk on every dollar you pay.
If you purchased one make certain you get out before the special assessments commence, which won’t be long after the expiry of the warranty period.
Be smarter, never purchase one.
Upset-Government-856 on
Being fucked by a micro condo is pretty unsatisfying.
HotBreakfast2205 on
Finally they are calling it what they are! Instead of being sold
And peddled as luxury apartments
Serious_Cheetah_2225 on
The worst part of the micro condos is when they start tearing down walls to make 1 condo with 2 micro condos which will have an even worse lay out than a micro condo 😭
Lucibeanlollipop on
Umm, because they’re micro condos? It’s kinda in the name . . .
turtlefan32 on
well….they are ridiculously expensive
TurboRad54321 on
I read “micro-condoms”….
oivaizmir on
‘low prices will be shortlived’
Let’s get to those low prices first! 1,000 CAD per square foot is still rich person territory.
TissTheWay on
No one ever liked the idea of fusing the words ‘micro’ & ‘condo’.
bcl15005 on
Because condos are the thin-end of the wedge when it comes to this issue, which is that for-profit developers increasingly cannot build homes for a price that people are willing to pay. The math just doesn’t add up in a lot of cases.
Assuming land values don’t significantly decrease and government doesn’t undertake more publicly-funded housing development, we’re just going to get more purpose-built rentals instead of getting larger or cheaper condos.
I’d argue that’s almost a return-to-form, considering homeownership has historically been the exception rather than the rule for people living in large cities prior to WW2, although accepting that regression feels like wasting an opportunity for change – *i.e. significant govt investment into non-market housing stock like coops.*
ghost_n_the_shell on
They never really had any appeal. People bought them up as condos investments. People don’t want to pay more than a mortgage to live in a shitty shoe box that the owner themselves would never consider.
Simple really.
RootEscalation on
Why Canada’s coffin in the sky are losing their appeal should be the tile?
slumlordscanstarve on
Shoe box condos are shit quality and no one wants to live in them
ValeriaTube on
Condos are already too small, you’re telling me there’s smaller versions?
leopardbaseball on
I don’t think 400 sqft 1bed condos with ‘den’ were appealing to begin with. Invoosters thought they were, but nope.
39 Comments
The dog crate condo glut is a good thing. That’s why prices have dropped and will continue to drop.
Did they ever have appeal beyond an investment?
“Investors own the majority of condos under 600 sq ft in Toronto, according to national database Statistics Canada”
This, as well as their high cost of construction, is the problem.
If these were reasonably affordable (ex. $200,000), they could definitely work for a lot of people, especially short-term.
They were never built to be lived in. They were built to be visited for a few days. We should work on a hybrid for hotels using them and cut the losses.
They’re speculative investments. People sign contracts to buy them at inflated prices before they’re built with the expectation that the value will be higher when the condo is complete and they take out the mortgage.
Problem is the value isn’t going up anymore, so when the condo is ready they’re now hundreds of thousands under water and the bank won’t finance it.
Because short term rentals aka Airbnb is being outlawed for use in residential.
They aren’t long term homes.
Who did they appeal to?????
You dont vant to live in ze pod? Eat ze bugz?
They never had any appeal, Canadians were just out of options. Carney stopped Trudeau’s insane immigration scheme, so naturally prices went down.
A walkin closet for the price of a house. Yeah no.
They were advertised to investors as money-printers. Turns out real estate only grows infinitely if there is demand
Who wants to raise a family in 600sqft? Sure if not given a choice we could all live in bunkbeds in rooming houses….
I have no idea how people are doing it. I have a great job and support my wife and hopefully a child in the future. I have no idea how anyone is doing that in under 1000sqft comfortably.
People don’t want to live in a shoebox.
Because they don’t even make any sense. They should be for single professionals to have an affordable option. Not 350-450k. At 200-250k people would be snatching these up.
I don’t need a massive place. But we live in a big country with lots to do.
They are trying to build these micro condos everywhere. Where would you put a snowboard? A tent? Camping gear? Out of season clothes?
I don’t need luxury finishes and a tiny space. I need modest finishes, and something that lets me have a hobby and work and sleep and cook and eat.
Lazy journalism strikes again. We have been talking about this for over a year now
What do they mean “losing”? Aside from a very small (no pun intended) subset of people, they never had any appeal to begin with! People want to be able to *live*.
They never had appeal. Nobody wants to live in those awkward tin cans.
Think what you can do with 400 square feet for only 3k a month.
70,000$ product sold for 700,000$ with Condo fees and Mortgage fees that double the cost of most detached homes.
Literally designed to be between 300-500Sqft Micro concrete dog crates with most of the buyers on record for saying. “I didn’t buy this to live in, who would want to live in that?”
Where entire buildings were sold to Foreign capital outside of Canada, or sold to slum lords inside Canada who had AirBnB and Short term rental slumpires.
Where Investors were tricked by real estate people saying. “Buy this, and your retirement is set. Canada house prices only go up look at these 30 years where its been true! At the low cost of your current retirement savings.”
Gee, I wonder why no one wants to buy them.
Bonus points.
8-12 months of market product on the MLS right now, with no one interested. Double the market inventory is being held back by developers on what is called a “Shadow inventory” so realistically there is actually close to 2 years of inventory, but they don’t want to flood the market to drop prices. (Developers don’t pay empty homes tax on these units as they have not hit “Market” yet through the MLS.)
In 12 months we’ll have the first 5% rental stock coming online, in 12-24 months we’ll have another 10% rental stock coming online and 36-70 months we’ll have another 10% rental stock coming online.
This is how there hasn’t been no mass layoffs in construction and development even though no new “Housing starts” has happened in the last year. Yet everyone is employed and we’re still starting new projects.
All new projects and current large projects are purpose built rentals being built. The money to fund it is coming from CMHC and their no risk loans that cover 75-95% of the project. With a 5-25% downpayment from the developer. These purpose built rentals are being sold to pension funds at 50 year amortizations, which means they don’t need to make money through rents for the first 1-3 decades of construction. As assets they’ll be worth more then what it costs to make them in the long term.
The reason why most real estate people keep getting the market wrong, and why everyone keeps saying. “Built up demand has to come back.” Is because Canada hasn’t been in a situation where it had so much useless inventory selling for premium with so much rental stock coming online shortly.
This is the first time Canada has built serious numbers of purpose built rentals since 1970’s. Close to 60 years ago, since the making of purpose built rentals had ended when Canada ended the war homes building that started after WW2 and ended around the time of the 1970’s.
Anyone who says the market is fine and will make a turn around has 0 clue what they’re saying. Especially when Banks right now are hoarding 11X the amount of money they did for a down turn then they had just 2 years ago.
pfft listen up I do not want a million dollar mortgage on a 600 square foot box NO and now the developers who were building air b and bs are crying???? No, we do not live on top of one another beehive style.
Now what did you learn???
Here’s to real estate investors getting screwed, hopefully prices continue to collapse.
The market becoming better for regular people needing to buy or rent is always a good thing.
I can provide a perspective as a real estate developer. We build rental apartments. Most of them are 1000 sq fr, 3 bedrooms. My company was started two years ago and now we have 96 units together as a mini community of sustainable, family oriented apartments.
Global money (not foreign investors but think sovereign wealth funds from Saudi, UAE, Europe etc) was providing lot of liquidity because the returns into condo development were some of the best in the world. And Toronto is a world class city considered a stable asset.
When the prices dropped, the global institutional money turned off the tap. The global institutional money wanted fixed returns and maximizing unit count gave developers incentive to sell per unit to maximize profits. It’s a game that’s been working for last 30 years. Spanning almost 2-3 generations. That has come to a grinding halt.
Rental developers have a different incentive. We have to maximize rent. And right now 3 bedrooms are fetching the highest rents and renting out the fastest. This is how it should have always been. We build to run the building for next 30-40 years. Condos were built to make them condo corp problems.
Added bonus to condo downturn is that labour has gotten cheaper and good reputable companies are bidding our projects competitively. This makes rental projects more affordable. Helping us hit our numbers to get CMHC financing.
Low key feels like you’re carrying the weight of multi family construction industry as a rental developer. Condo permits are stalled completely and they were a big source of housing numbers in Toronto and Canada. There are many layoffs in construction. But it’s a chance for companies to trim the fat.
People think condos sitting empty means that there is no housing crisis. In fact the units that are being put on MLS for sale are no longer part of rental inventory. They artificially increase rental prices. And with the highest number of condo inventory being on the market for sale means those units are not being rented. Which means the rent will stay high. We are about to experience a massive spike in rents as a country especially in City of Tornto. Cities like Paris, Dubai, Honk Kong, Singapore all have high rents. Especially when converted to USD.
They only ever had appeal in a squeezed market driven by a combination of greed and market imbalance between supply and demand in the GTA.
The reality is most of these modern condo buildings are shitboxes. Built with glass fascades that will barely make it 10 yrs and excessive condo fees where the external management company is making a nice chunk on every dollar you pay.
If you purchased one make certain you get out before the special assessments commence, which won’t be long after the expiry of the warranty period.
Be smarter, never purchase one.
Being fucked by a micro condo is pretty unsatisfying.
Finally they are calling it what they are! Instead of being sold
And peddled as luxury apartments
The worst part of the micro condos is when they start tearing down walls to make 1 condo with 2 micro condos which will have an even worse lay out than a micro condo 😭
Umm, because they’re micro condos? It’s kinda in the name . . .
well….they are ridiculously expensive
I read “micro-condoms”….
‘low prices will be shortlived’
Let’s get to those low prices first! 1,000 CAD per square foot is still rich person territory.
No one ever liked the idea of fusing the words ‘micro’ & ‘condo’.
Because condos are the thin-end of the wedge when it comes to this issue, which is that for-profit developers increasingly cannot build homes for a price that people are willing to pay. The math just doesn’t add up in a lot of cases.
Assuming land values don’t significantly decrease and government doesn’t undertake more publicly-funded housing development, we’re just going to get more purpose-built rentals instead of getting larger or cheaper condos.
I’d argue that’s almost a return-to-form, considering homeownership has historically been the exception rather than the rule for people living in large cities prior to WW2, although accepting that regression feels like wasting an opportunity for change – *i.e. significant govt investment into non-market housing stock like coops.*
They never really had any appeal. People bought them up as condos investments. People don’t want to pay more than a mortgage to live in a shitty shoe box that the owner themselves would never consider.
Simple really.
Why Canada’s coffin in the sky are losing their appeal should be the tile?
Shoe box condos are shit quality and no one wants to live in them
Condos are already too small, you’re telling me there’s smaller versions?
I don’t think 400 sqft 1bed condos with ‘den’ were appealing to begin with. Invoosters thought they were, but nope.