A Case for More 3-Bedroom Condos

Whatever happened to the 3-bedroom condo? This has become a mystery in the Canadian real estate sector and local housing markets across the country. Decades ago, it was more common to come across 3-bedroom units as the post-war construction boom facilitated the growth of new families.

Fast-forward to the present. Finding 3-bedroom condos is like hitting the jackpot, accounting for six per cent of all condo sales in the Greater Toronto Area (GTA). With a lack of 3-bedroom condos in many housing markets, millennial families are forced to adapt to one—or two-bedroom apartments.

RELATED READING: Read the RE/MAX Canada Condominium Report

These days, it would appear only bachelor and 1-bedroom units are being built, whether in major urban centres or suburban communities. According to a 2020 report by the City of Toronto, fewer than one-fifth of owned and rented condominium units possessed three or more bedrooms.

Meanwhile, the lack of 3-bedroom condos is not a new phenomenon either. For example, North America’s fourth-largest city, which has enjoyed a construction boom over the last several years, has witnessed a lack of 3-bedroom units for the past decade.

In 2017, a joint study by Urbanation and the Ryerson City Building Institute discovered that the number of condos planned to be erected with two bedrooms or more in the next five years is far lower than what was built in the 1990s.

“Construction is still tilted towards one-bedroom units,” the report stated. “Despite the coming surge of households seeking family-sized units, we are building fewer two-bedrooms proportionately than ever before.”

Indeed, if households come across 3-bedroom condos for sale, the prices are comparable to single-family homes. In many large cities, a 3-bedroom condo or apartment typically sells for $1 million or rent for between $3,000 and $4,000. It is estimated that only 0.1 per cent and 1.9 per cent of vacant 3-bedroom units are affordable for the average Canadian household. Some places do not even have affordable 3-bedroom rentals, including Vancouver, Calgary, and St. John’s.

As Aled ab Iorwerth, deputy chief economist with CMHC, told CBC News this past spring: “These three-bedroom units are rare and expensive. It doesn’t leave a lot of options.”

Additionally, some would push back against the design of the modern 3-bedroom condo, with industry experts calling them “Frankensuites.”

“There’s not that many three-bedroom units on the market and many of the ones that are kind of like Frankenstein-style,” said Helen Stopps, an architectural science professor at Toronto Metropolitan University, in an interview with The Toronto Star. “You’ve got glass dividers around tiny, tiny rooms. You have a closet and can fit a bed, but you can barely walk around it.”

But while some critics argue that new builds are only being constructed for investors, the reality is that regulations, building codes, and zones are contributing factors, says Stephen Smith, the executive director of the non-profit U.S.-based Center for Building in North America.

“North American zoning and building codes work together to drive up the size of multi-bedroom apartments in particular, putting them financially out of reach for many parents raising children,” he wrote in a May 2024 post. “The effect is clearly that apartments, in order to provide the same number of bedrooms and give everyone a window, must necessarily consume far more floor area.”

Housing affordability continues to be one of the most important issues facing Canadians today. It remains to be seen if public policymakers at all three levels of government will employ measures to enable the construction of 3-bedroom condos.

A Case for More 3-Bedroom Condos

Here are three under-the-radar trends unfolding in the Canadian real estate market:

• Many families choose to live together, be it because of the rising cost of living or caregiving needs (child care or caring for an aging parent).
• The Canadian government is imposing new immigration measures to allow newcomers to bring their families, even temporarily.
• Around a quarter of Canadians are postponing having children because of housing affordability, while another quarter is abandoning family-planning endeavours because of the high cost of housing.

Over the last few years, more households have fled big-city living in favour of small-town residence. Still, despite the growth of families engaging in an urban exodus, Canada’s large cities are still attracting people and businesses. They remain the focal point for economic activities and cultural and social affairs.

Therefore, as cities continue to be the premier destination for young families and newcomers, diverse housing options, like a 3-bedroom condo or apartment, will become more pressing. Experts purport that 3-bedroom condos can kill multiple birds with one stone as they address the surplus of urban housing challenges, mainly on the pricing front. The greater the number of 3-bedroom condos available, the lower the price tag, whether for purchase or rent.

While a 3-bedroom can be highly beneficial to growing families and even multi-generational living, this type of housing unit can also be terrific for shared living arrangements. These groupings can work for international students, cohabitating young professionals, and individuals seeking roommates in larger spaces. Rather than having to relocate to rural areas to find a kind of dwelling, they can remain in the city and enjoy shorter commute times, easier access to crucial services, and perhaps closer proximity to work or school. This bolsters liveability!

In the end, from an economic and financial perspective, constructing more 3-bedroom condos can be a strategic and wise decision for cities, businesses, and households. At a time when there is a significant gap in the supply and demand of a multitude of housing categories, another housing option can help fill the hole, stabilize prices, and meet the needs of other population segments.