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Pedestrians are seen in a park at the City Place condo development in Toronto, Ont. March 15/2012. (Kevin Van Paassen/Kevin Van Paassen)
Pedestrians are seen in a park at the City Place condo development in Toronto, Ont. March 15/2012. (Kevin Van Paassen/Kevin Van Paassen)

In Toronto, the new mantra is: Build tall, live small Add to ...

After 60 years of relentless advance into every corner of Toronto and the surrounding region, suburban tract-house sprawl is slowing, and may be grinding to a halt.

Blame it on the towers. A citizen of the Greater Toronto Area who hits the streets in search of a newly built home to buy these days is more likely than ever before to land in a condominium high off the ground.

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But if the GTA is turning into a megalopolis of apartment-dwellers, we're doing so in units that are considerably more compact than they were just a few years ago. The average area of a new suite nowadays is 820 square feet, down by 100 square feet – that's the size of a 10-by-10-foot room – from the mid-2000s. Developers, it's plain to see, are building ever-smaller apartments, a move that is encouraging home-buying Torontonians to create smaller families and live more efficiently now than at any time since the Great Depression. At least for most people in Hogtown and its environs, the post-war era of the spacious new detached house is well and truly over.

These are a few conclusions that can be drawn from an interesting study of the GTA's $22-billion new housing market recently completed by RealNet Canada Inc., an important Toronto-based provider of real-estate information and analysis, and its partners in Toronto's Building Industry and Land Development Association (BILD).

The survey looked at the nearly 46,000 purchases of new digs that took place in the region last year, and discovered that 62 per cent of them involved apartments in tall stacks. That's a dramatic turnaround from just a dozen years ago, when new high-rise lofts commanded only 23 per cent of residential market share and sales of low-rise dwellings (detached and semi-detached homes, townhouses) accounted for most of the remaining 77 per cent.

Driving this change (which shows no signs of abating), at least in part, is the lower price of apartments. The average cost of a new low-rise home in the GTA increased by 8.4 per cent during 2011 to just over $545,000, while that of a high-rise condo actually fell a couple of percentage points to around $434,000. Of course, you get much less house in a tower than you get on the ground: The average difference between the two is 820 square feet versus 2,400 square feet. The RealNet/BILD review did not examine the reasons that GTA consumers are ready to pay something approaching house prices for condos with a third of the area a new house affords.

We can all guess what those reasons are, but far down the list, apparently, is zest for condo living. George M. Carras, president of RealNet Canada, believes that the GTA's bullish market in new high-rise apartments is mainly powered by a conspicuous shortage of anything else to buy.

“You're seeing the ultimate supply-driven slowdown,” Mr. Carras told me. “New low-rise housing has declined over the last decade. Unfortunately, no one really sees that, unless you do what we at RealNet do. It's easy to see a 30-storey building. It's hard to miss the new condo towers and cranes that are popping up in the city. What's really easy to miss is the shrinking number of detached-house subdivisions in the GTA. That story has not been told.”

The story Mr. Carras is thinking of, he said, has one principal author: Ontario's provincial government. Seven years ago, Queen's Park laid down sweeping new land-use regulations designed to boost density in the province's built-up areas and curb the gobble-down of the countryside by suburbia. “What we're showing is how the market has shifted since the province introduced the growth plan back in 2005,” Mr. Carras said. “All we are seeing is the ultimate play-out of those guidelines, which the development industry has to abide by.”

In fashioning the new rules, Ontario was trying to deal constructively with two closely related issues: the impending disappearance of the last GTA greenfields and brownfields suitable for low-density residential development, and the expected arrival in the area of a great many newcomers from across Canada and from abroad over the next few decades.

“When you look at the data,” Mr. Carras observed, “you find that the region has grown by 2.5 million people over the last 30 years – by 98,000 annually in the last 10 years. We sold more than 40,000 new homes in 2011. For every 10 new people that exist in this region, we sold four new homes, which works out to be about two and a half people per home. That's not an outrageous number.

“The question then becomes what kind of homes are we delivering, and that's where the shift is really pronounced. You're looking at smaller households – and certainly more intense living.”

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