Why are Toronto micro-condos losing value?

Toronto's condo market is experiencing a significant downturn not seen since the 1980s, causing micro-unit values to crater.

What percentage of Toronto condos are investor-owned micro-units?

Investors own the majority of condos under 600 square feet, making up 38% of condos built in the city.

How does Toronto's micro-condo market compare to the US?

Micro-units represent a much smaller share of the US market compared to Toronto, though their prevalence has doubled.

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Toronto Micro-Condos: Value Cratering Fast

3 Jan

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Summary

Micro-condos in Toronto are losing value rapidly.
Canada's condo market is at its lowest since the 1980s.
Investor-owned small units make up 38% of Toronto condos built.

Toronto Micro-Condos: Value Cratering Fast

The value of micro-condos in Toronto is experiencing a significant decline, marking a sharp downturn in Canada's real estate market not seen since the 1980s. These compact living spaces, originally built to maximize affordability in high-value areas, now contribute to a growing number of unsold units across the city.

Rapid development starting in 2016 saw a surge in micro-condos, with investor-owned units under 600 square feet becoming dominant. They now constitute 38% of Toronto's condo market, a substantial increase from earlier figures. This trend has led to debate about developers prioritizing investors over long-term residents.

As demand for condos continues to fall, with 18 projects cancelled in Toronto over the past year, micro-units are depreciating faster than larger properties. This situation is contrasted with the U.S. market, where similar tiny units represent a much smaller, though growing, market share.

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