Micro-condos: What they are and who is buying them
Micro-condos are very small condo units ranging in size from 220-400 sq. ft., but typically we see them range between 250-350 sq. ft. These units are expertly designed to maximize space so you still have all of the creature comforts. Fold away furniture is standard issue. A bed will fold up to make room for a kitchen table. Storage space is created in every nook and cranny and is collapsible or can be hidden. Every inch is used to its maximum potential. They are really quite innovative!
Micro-condos are ideal for investors looking to rent them out as they typically rent for more money per sq. ft. than larger units. Students, single professionals, first-time buyers and pied-a-terre seekers are interested in such units. People are willing to make the trade for less personal space in favour of more communal space. It’s not odd to see people using a neighbourhood coffee shop as a sort of living space. Individuals buying these units typically want to live in the downtown core without paying downtown prices. Big cities, where space is at a premium and real estate is very costly are seeing these types of developments because they are affordable, albeit small solutions. They are minimalist spaces designed for a particular type of lifestyle.
Micro-housing has been around for a long time in Asia, specifically Japan. Historically, families would live in small units of around 100 sq feet that had large communal areas. It wasn’t until after WW2 that home sizes started to grow. Micro-condos are also popular in Europe – Paris, Barcelona, Rome and London.
We are starting to see this trend move to Canada. British Columbia has several micro developments both for sale and for rent. They are situated in the downtown core of B.C.’s major cities - Vancouver, Victoria and Surrey.
Builders recognize that transit is integral to these developments, and since living space is sparse dwellers will spend more time in the neighborhood. Walkability is another key issue. This trend will continue to expand and will be interesting to watch over the coming years. It certainly won’t be in every Canadian city, but the major cities like Toronto are already seeing an uptick in popularity.
(a) Location, location, location!
(b) These units are more affordable, allowing people to live in some of the cities hottest neighborhoods without paying exorbitant prices.
(c) Modern, uniquely designed spaces and the reduction of your carbon footprint. Since you can’t buy furniture for space you don’t have, it forces you to be frugal.
(a) One or two things out of place can make your space look cramped, thereby forcing you to tidy up. Small spaces can feel too confining for some.
(b) It is very difficult to secure financing on micro-units. Most banks and lenders have minimum sq. ft. requirements. Although it is not impossible to mortgage a micro-condo this is due diligence you should perform before you start looking.
(c) Keep in mind that the resale market for these units has yet to be proven.
The average size of condo units has been decreasing for years. A 600 sq. ft. condo is very typical, if not the norm in Toronto. Micro-units are the next step in this trend. Canadians are migrating to city centres, choosing to live where they work and play, thus avoiding a long commute. Younger generations (i.e. Gen Y) are ditching cars for public transit and high walkability scores.