The Decline of Micro-Condos: Canada's Housing Dilemma

Sat Jan 03 2026 22:59:07 GMT+0200 (Eastern European Standard Time)

As Canada's micro-condos fall from grace amidst a market downturn, we explore the challenges and implications of small living spaces in urban environments.

Micro-condos in Canada, once seen as a solution for affordable urban living, are losing their appeal as the housing market declines. With oversupply and changing demographic needs, many of these compact spaces are being resold at significantly lower prices, raising questions about the future of urban housing and development strategies.

Maggie Hildebrand's first apartment in Toronto had a kitchen, a dining table, a workspace and a bed – all in the same 300-square-foot room. It was a decent home at first, close enough to her job downtown and with all the bare necessities for daily living.

But it didn't take long for the 28-year-old to feel boxed-in. It was so isolating in that tiny space, she told the BBC. It definitely feels like it's just somewhere to put worker bees during the night.

Ms Hildebrand lived in one of the city's micro-condos, a once rare sight in Canadian real estate that has become ubiquitous in the last decade thanks to fast-growing, high-rise developments in major cities like Toronto and Vancouver. But - as Canada's condo market sinks to lows not seen in decades due to a series of market pressures - the value of these micro units is cratering faster than any others.

The condo market is experiencing a downturn not seen since the 1980s, with thousands of move-in-ready units sitting empty and unsold across Toronto and its surrounding regions. Over the last year, an unprecedented 18 condo projects were cancelled in the city, with experts expecting that number will grow as demand continues to plummet.

The downturn has reignited debate over whether developers catered too much to real estate investors by building smaller, more affordable units that minimised square footage to keep prices low in areas where land values are high, and which were often designed to be rented out or flipped for profit. Investors own the majority of condos under 600 square feet in Toronto, according to Statistics Canada.

Construction of these small units skyrocketed in 2016, and they now make up 38% of condos built in the city, compared to only 7.7% before.

With so much inventory on the market in Canada, some micro-condos that had sold for half a million dollars a few years ago are now reselling for C$300,000 ($217,000; £163,000) or less. It's a race to the bottom getting these things sold, said Shaun Hildebrand, president of Urbanation.

The condo slump is not unique to Toronto; Vancouver is experiencing a similar, albeit smaller, downturn. Experts attribute this to an oversupply of units combined with changing immigration policies that have left the market oversaturated.

Renters like Ms Hildebrand have arguably benefitted from the situation; with a greater supply of units, more options are available at slightly better deals. She has since moved to a larger apartment for just a small increase in rent.

As Canada grapples with this housing crisis, questions loom over future developments and the balance between affordability and investment. The attention has shifted towards understanding what homebuyers truly need in urban environments.