Condo buildings have always been about single professional, hotel-style living close to major hubs in their cities. They have also been the traditional first step for people looking to own property after finishing school and getting into a career. In Canada, during periods of prosperity, kids of well-adjusted families would have those families pay for their school, while the kids used summers to work and save money for the downpayment on their first property, a condo. Condos are luxurious and fun compared to most apartment buildings and boring old suburban houses. Then, after a while, our condo dwellers find someone to date long-term, happily pair up, and before you know it they sell their individual units, combine wealth and buy a house in the suburbs where they can have babies and raise them to repeat the cycle. Condos, therefore, are left to single professionals and are always in demand for buyers and renters alike, making them a wise investment that is far more liquid than other property types.
Sounds perfect, doesn't it? A glitzy, well-oiled positive outcome machine. That is, until you throw a wrench in it- something that has already happened beyond the ability of most people to comprehend, with ostensibly ground shaking consequences on the horizon. Let's look at how this is playing out in the Greater Toronto Area.
The Greater Toronto Area has a tremendous burden right now to provide solutions for everyone, and it's a thankless job. The area is supposed to offer housing and jobs to immigrants from around the world, as many remain here due to public transit, schools and ostensibly more work opportunities. Highly skilled professionals are leaving other provinces and coming here because there is nothing for them back home in terms of career and future. Oh, and there are rich people around the world not interested in living here long-term, but certainly looking to park their money in a safe, stable country like Canada, so Toronto area has to accommodate that too. Look, we could have had more government and privately built rental buildings. Something reasonable, affordable and livable, with more square feet per unit. Instead, we allowed for the building of hotel-styles condos that cater to single professionals and look so damn good that all the world's rich investors want to get in on the action. Whether you own one of these or you just rent, the idea is that as soon as you pair up and want a baby, you move out and get a bigger place. Except, bigger places are too far for the now downtown-centric young professionals, and they are beyond expensive. Yet, us humans have our biological clocks ticking and we seldom care about anything else when push comes to shove. And there, dearest readers, is one helluva wrench. Young professionals are starting to pair up and make babies in tiny one bedroom condos (one bedroom and a den if they're lucky), and the numbers of people making this choice are rising!
Now, dearest readers, ask yourselves this question. What will happen to these luxurious hotel-style condo buildings when most floors' hallways smell like diapers, babies can't stop crying and it carries through the walls and doors of condo units, and the "happy" parents are at each other's throats every other day throwing things at each other because that's what happens wen you stuff a young family into a shoe box? Then, what will happen when these babies grow up to be toddlers and later rowdy adolescents, running around damaging the common elements and amenities in these beautiful but sensitive buildings? I have already seen many of these things happen. In my building, youngsters are damaging walls and common elements, running barefoot in the gym and messing with machines and weights while totally unsupervised, and oh so much more. But I digress. To answer my own question, what will end up happening is that the liquidity of condo units will drop, and their appreciation will grind to a halt.
What then, you might wonder? As people become desperate to sell and get out of the situation, large rental building corporations will swoop in and buy up entire condo buildings or large percentages of the units for pennies on the dollar. Foreign investors may refuse to sell, but the local owners likely will so they can free themselves up to buy better property elsewhere- even if it's all at a financial loss. Then, these once glamorous buildings will have property management companies that won't work so hard on maintaining the building, and rental offices that will stuff whoever into corporation-owned rental units just to keep the occupancy up. The days of having to bid for a condo unit rental and jump through hoops will be over.
By this point in time, if the larger homes don't become more affordable, it'll be a new age of even more townhouses and perhaps cheaper modular, mobile or so called tiny homes. Basically, people will pick whatever they can afford, just so it doesn't have to be one of those darned condo units. This will decrease the influx of people into Toronto area, and businesses will be compelled to either open up offices outside it in less densely populated, cheaper areas (hallelujah for Niagara Region haha), or they will be compelled to set up every possible employee as a telecommuter so they don't have to drive into the city, remaining instead in their large, affordable small town house- far away from the urban hell that the city will likely become. Oh, and why wouldn't it become hell? I don't see any infrastructure being built for the condo babies who are destined to become city kids...
Some people have said that projecting present into the future doesn't make for an accurate forecast. To them, I say that history repeats itself. This has happened before in most Western metropolises. The only difference, this time around, is that we have never been less ready than we are right now- as a nation, a society and an economy.