Tuesday, November 27, 2012

On Average Canadian Homes Are Getting Smaller

  There is an old saying that figures lie and liars figure but statistics are pointing to a change in what Canadians can expect the future will hold with respect to residential housing.

  According to the Canada Mortgage and Housing Corporation (CMHC), the average Canadian home is shrinking. Based on a survey done in 2000, the average size of a single-family detached home in Canada was 2,266 square feet whereas in January 2012, an updated CMHC survey showed the average house size had shrunk to 1,900 square feet. This trend is expected to continue and I suspect there are a variety of reasons behind it.

  Firstly, some of the trend to smaller homes is being forced upon us. The Ontario government is forecasting a 44% increase in the population of the Greater Toronto Area (GTA) by 2036 when over 9 million with reside in the GTA. As a result, the province via their Places to Grow initiative is pushing to curb urban sprawl and the associated gobbling up of productive farm land which I am all in favour of. In order to accomplish this, the province is having individual municipalities including those outside the GTA manage their zoning and planning so as to increase residential density. Typically this means smaller dwellings and greater height.

  Outside of the legislative process, there is the consumer driven move to smaller homes. My daily real estate involvement reflects a growing trend where consumers are becoming increasingly conscious about energy usage and expenses. At the same time, the growing trend is towards smaller families with some couples electing not to have children at all. Both of these factors are contributing to the desire and or need for smaller homes.

  The other factor that cannot be ignored is that of immigration. Those immigrating to Canada often come from densely populated countries where multi-family residential units are the norm while . It’s what they are used and is not a lifestyle change that requires an adjustment. Living in close proximity to your place of work with access to public transit is a growing trend and the move to smaller housing units ties in with that.

  In his book Boom, Bust, Echo, Dr. David Foot maintained that real estate is affected far more by demographics than economics. The trend to smaller residential homes may be a combination of both a direct shift in demographics with an accompanying desire for improved economics with respect to housing prices and the associated costs for energy usage, property taxes etc. Nonetheless, a generation of home buyers is coming that will demand less square footage with greater overall operational efficiencies. The automotive industry discovered this trend with respect to consumer demands in vehicles albeit late and financially painfully. Hopefully builder and developers do not suffer the same fate by continuing to build large, energy hungry homes located in areas resulting in long commutes for buyers.

  There is another old saying as well that bigger is not necessarily better. Despite growing wealth in this country, we may have reached the peak in demand for larger homes. What are your thoughts?

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Rick relocated to Collingwood from Toronto in 1985 through a transfer with Goodyear Canada. In 1987 Rick was recruited by a major client of Goodyear’s, managing their Canadian business based in Barrie before moving to Chicago in 1992 as Vice President of Sales & Marketing. Upon returning to Canada in 1996, Rick ran an industrial products manufacturing company in Stratford, Ontario. In 1998 Rick returned to Collingwood with his two children. Rick is a licensed real estate Broker with Royal LePAGE Locations North in Collingwood and holds his MVA designation (Market Value Appraiser-Residential). He is an active volunteer in the community serving several years on the Board of Directors with the Collingwood Chamber of Commerce as Treasurer, 6 years on the Board of Directors for the Southern Georgian Bay Association of REALTORS® of which he is the Past President (2008) and currently serves on a committee with the Ontario Real Estate Association. Rick is a diverse executive manager with extensive experience in strategic planning, manufacturing, finance, human resources and quality assurance management.