The Resilience of Micro Condos: Why These Small Spaces Will Thrive Amid Market Challenges
Why Micro Condos Will Survive the Current Housing Market Downturn
By Garry Marr, Financial Post – October 15, 2025
Micro condos are small. They measure about 300 square feet. They sit in busy downtown cores like Toronto and Vancouver. Lately, buyers and investors find them less attractive. Yet one real estate expert says these small units will last. They will stay in the housing market as conditions change.
The Current State of Micro Condos
Micro condos were once in high demand. The real estate boom and the pandemic fueled a fast pace of building. Developers built many small units for city dwellers. They aimed to provide affordable homes with rich amenities.
Investors now step back. They see weak capital returns and uncertain rental income. First-time buyers also hesitate. High prices and steep interest rates push them away, even as rents drop. Families have shown little interest too. All these factors lower demand.
Buyer Behavior and Market Dynamics
Greg Zayadi, president of Rennie & Associates Realty Ltd., notes that many buyers pause at the closing stage. They often withdraw from deals. These units need smaller deposits. A small deposit makes it easier for buyers to exit if problems arise. Developers then face the cost of lost pre-sale deposits. This leaves many units unsold.
For example, Vancouver has 12,354 unsold micro condos in Q3. That is a 16% rise from the previous quarter. Prices fall between $950 and $1,200 per square foot. Now, values are near 20% below their peak. Zayadi thinks it may take two years to clear this stock.
Challenges for the Micro Condo Market
New micro condo projects face hard challenges. Builders now struggle to match price, size, and amenity needs. Buyers look for larger units at lower costs. They want homes that suit end-users rather than investors. Technical issues stop developers from combining several small units into one large unit. Plumbing, electrical work, and high renovation costs create obstacles.
Brad Burns, senior associate and design director at Gensler, shares a saving grace. In the student housing niche, micro and nano units work well. In Vancouver projects, units as small as 160 square feet serve students. They offer a full bath, a cooking space, and a work area. Furniture and shared tools add extra help.
The Future of Micro Condos
Micro condos lose their shine for some buyers and investors. Still, experts like Burns and Zayadi see a lasting role. For single people and students, tiny and smart units hold real value. Urban life and minimalism keep these condos in style.
Even if the market calls for larger and cheaper housing, micro condos will not vanish. They will change and serve specific groups. They remain part of the evolving housing scene.
Photo Caption: A 268-square-foot micro condo in Montreal’s Griffintown area includes a pull-out couch to maximize limited space. (Photo by John Mahoney / Montreal Gazette)
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