The population between the ages of 35 and 44 will rise by more than 200,000 over the next decade and the GTA’s condo-dominated housing market may not be able to accommodate the influx, warns a new report from the Ryerson City Building Institute.

The report says that the population of those between the ages of 35 and 44 will go up by 207,000 by 2026 “driving increased demand for larger, more family-friendly housing.”

Aggravating matters further, the report says that the population of seniors will rise by 484,000 during the same time period with many of them choosing to downsize in search of “similar housing options that young families struggling to afford single-family homes will also want.”

This comes against a backdrop of frenzied development in the condo sector, though only 41 per cent of the 94,000 units slated to be completed in the next five years have two or more bedrooms. Within the City of Toronto the percentage of planned units with two or more bedrooms is even lower – about 38 per cent.

“In the last decade millennials who were in their early 20s were really booming and they drove some demand for one-bedroom or studio units but they are getting older now, they are looking to have families and we are going to see this surge in demand for family-sized units as a result,” Graham Haines, a research manager with the Ryerson City Building Institute, told CP24 on Tuesday. “It is sort of a reality of living in the GTA now. We are not building a lot of new houses and young families are getting used to the idea of living in condos and living in townhouses. But we need to start delivering a product that actually gives them an opportunity to live here.”

The report says that the price gap between detached houses and condominiums has tripled since 2007 – going from $200,000 to $600,000.

As a result, it says that young families will increasingly look to condominiums for housing, creating a need for more multi-bedroom units.

“I think we are going to need some creative solutions,” Haines told CP24. “The demand for condos has been pretty strong but it is not always end-users that are actually buying condos. How can we make sure that condos are being built for end-users rather than the investors that are getting in at the ground floor?”

Some reasons for optimism

The report points to several reasons for optimism, including an increase in the number of units with two or more bedrooms that are slated to be finished in the next five years (38 per cent) compared to the number that were finished between 2012 and 2017 (35 per cent).

As well, the report says that the percentage of units with three or more bedrooms in the pre-construction phase (4.6 per cent) is slightly higher than the percentage in the construction phase (3.4 per cent), likely due to the city’s efforts to force developers to build more multi-bedroom units as part of the rezoning process.

Nonetheless, the report warns that developers are “building fewer two-bedrooms proportionately than ever before.” At a time when there is a “coming surge of households seeking family-sized units.”

Haines said that there is a dearth of affordable multi-bedroom condominiums, particularly in the downtown core where most new condominiums are being built.

“I think there are a lot of challenges. Condos are expensive and bigger condos are very expensive,” he said. “They are pushing $1,000 a square foot downtown and the City of Toronto recommends 900 square feet for a family-friendly two-bedroom unit. That is not affordable for most people.”

The report says that one way to address the lack of affordable family-friendly homes is through the construction of more buildings under six storeys, which it dubbed the “missing middle.” Currently just 3 per cent of planned condominium units are located in low-rise buildings.

“Buildings of this scale offer condo apartments located within existing lowrise

residential neighbourhoods. In addition, buildings six storeys and under can be built using wood frame construction which offers greater flexibility for developers,” the report says.

The report , titled “Bedrooms in the Sky: Is Toronto Building the Right Condo Supply?,” was prepared in partnership with real estate consulting firm Urbanation.