The call for increasing levies on micro-condos and more incentives for larger spaces is not the solution, industry investors argue.
Raising the development levies on small condo units and lowering the fees for larger dwellings will not solve the family condo crisis.
Instead, this will punish a large pool of first-time buyers desperate to get on the property ladder. That is the word from industry experts who are playing down this suggestion by a number of developers and buyers.
“Affordability is the biggest issue for buyers and by increasing the levy and therefore price of smaller condo, you are punishing a lot of buyers,” argues Matt Elkind from Connect Asset Management/The Condo Store Realty.
With more people choosing to remain in the downtown core, the demand for family-sized condos has increased and especially for those who cannot afford to buy a single-family home. “Those who want to make the move from condo to home face bidding wars and so are discouraged by the market. They are now deciding to buy a bigger condo to meet their needs and price range,” says Elkind.
One of the suggestions put forward is that the price of a larger unit (1,000 sq.ft.) would sell for $325 per sq. ft., compared to today’s average rate of $550. The extra charges on smaller units would make up the lost revenue in government coffers.
“This situation involved more than just monetary incentives,” says Elkind. “We need to encourage more family developments with larger outdoor spaces and amenities that suit children. For example, Garrison Point has over four acres of space and facilities. We need more of these kinds of developments.”