Condos will face its “first real test” this year as more compact homes are set to emerge across Toronto – and investors are betting on big returns.
Investors are particularly after young renters who are not able to buy their own “shoebox” space outright but are still willing to live in a unit with an average of two living rooms and 500 square feet.
Brokers find investors are targeting micro condos to be able to cater to young professionals who wish to live near their city-based careers.
In fact, condos as little as 500-square feet can bring in well over $3 per square foot, while the rest of the market averages around $2.50 or $2.60, claims Shaun Hildebrand, vice president of condo research firm Urbanation.
He added that there are almost 3,000 micro condo units set to be finished this year in Toronto.
“This is something that the market and developers are going to be paying very close attention to in 2015,” Hildebrand said. “Sometimes we don’t know how strong demand is until we’re shown the supply.”
Moreover, investors of micro suites tend to have more power in asking for higher rents per square foot than larger units, “as many renters are willing to live in a slightly smaller space in order to save a bit on costs and live closer to the city core.”
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