As Condos get Smaller Downsizing Boomers Fret
By Susan Pigg
October 27, 2011
With new Toronto condo units averaging just 749 square feet, baby boomers are finding the word downsizing is taking on new meaning
Baby boomers Jack and Leona Anderson made their first big step towards retirement last summer when they flew to Toronto from their home in Regina looking for a condo.
It wasn’t the sticker price that sent the teachers into a mild panic. It was the size of the units.
“I just kept thinking, if I’m going to move into a space this small, it’s going to be at an old folks’ home,” says Jack Anderson, 61.
The Andersons toured soaring glass and steel towers equipped with basketball courts, sprawling exercise rooms, granite countertops galore.
But they couldn’t see a place where they could actually live their new life, until their agent took them on a trip back in time to The Bentley, an almost 30-year-old condo building just steps from the St. Lawrence Market.
In the end, the couple opted to overlook the dated lobby, oak-trimmed kitchen cupboards and two bathrooms in need of updating.
It was the 1,200 square feet of living space that wowed them, along with the building’s wood-burning fireplaces and rooftop garden. They paid $339,000 for the one-bedroom plus den corner unit.
“Our house is 3,000 square feet with two fireplaces. We spend a lot of time outdoors. That (rooftop garden) is a viable substitute. We will be able to go up there in the morning and have our coffee and read the paper,” says Anderson.
With condos getting smaller by the day, especially in the downtown core where new units average just 749 square feet, baby boomers are finding the word downsizing is taking on new meaning.
“There is definitely a disconnect between what the demographics are telling us versus what’s actually getting built,” says Farrell Macdonald, a Coldwell Banker realtor.
“If there is a vulnerability in Toronto’s housing market these days it’s on the condo side — not just because of the sheer numbers we’re building, but because of the size and quality.”
Canadian condo developer Tridel Group says 25 per cent of its buyers are empty nesters and while it does build some larger units, its biggest market by far is first-time buyers for whom affordability is more important than size.
“This (demographic) bulge is roaring towards us now and we’ve got people who are demanding alternatives but the market isn’t really responding,” says Macdonald. “We’re building lots of small, cheap and cheerful units but we’re not thinking long term.”
Macdonald hears complaints regularly from boomers who want to trade in family homes for simpler lives close to theatres and restaurants but refuse to be “plunked in a shoebox” better suited to single, young professionals.
That frustration is fuelling a renaissance among older condos, long considered less desirable because they lack flash and modern amenities and tend to have higher maintenance fees, says realtor Colleen Gray.
In the past year, Gray has seen even younger buyers starting to peek at the past.
Much of the renewed interest has been in decades-old buildings along Toronto’s waterfront, near the St. Lawrence Market and in midtown where units are selling for as little as $320 to $350 a square foot. That’s almost half the $600 to $700 per square foot of new units.
The tradeoff is higher maintenance fees. In The Bentley they average 67 cents per square foot (the Andersons pay $700 a month, which includes utilities), compared to about 50 cents in newer buildings, many of which don’t include utilities.
The biggest risk in older buildings is getting hit with costs for a new roof or heating unit that can overwhelm the maintenance fund.
But that day will come for newer units, too, given that fees don’t tend to reflect real costs, says Macdonald.
The Andersons are renting out their unit right now and plan to virtually gut their condo when they get ready to move to Toronto.
They know it will never have the look or feel of a brand-new building, but at the least it will have sparkling new bathrooms and a kitchen with the de rigueur stainless steel and granite, says Anderson.
“There are always going to be people who will want a property like this in downtown Toronto, just because of its square footage. I think in that way it was a very clever investment.
“Someday it’s going to sell itself.”