Ask a millennial about their thoughts on home ownership, and one of the first few things out of their mouth will probably be “houses are way too expensive.”
As the millennials group grows in size and gains purchasing power, it is no wonder that real estate developers are doing everything they can to attract this bunch into buying their first homes. However, it is no secret that Millennials value experiences over owning things. They have a mentality of “less is more” over possessions and would rather splurge on experiences than be tied down by ownership.
Which is exactly why micro-condos have been gaining in popularity. A micro-condo basically is a small condo unit that ranges from 220 – 400 sq. ft. in size. In land-scarce countries like Singapore, a micro condo makes perfect sense but what about bigger countries like Canada?
Let’s delve into the pros and cons of buying a micro-condo.
Pros of buying a micro-condo
1. Location
Generally speaking, micro-condos are located in space-constrained city centers where real estate is at a premium. These tend to be close to business centers, restaurants, and retail; if you work in the city, buying a micro-condo in a convenient location will definitely cut down on your traveling time to and from work.
2. Affordability
Probably the biggest reason for micro-condos’ popularity is their low gross selling price, which allows them to be within reach of the average person. This makes them all the more appealing to Millennials as paying a lower down payment and smaller mortgage allows them to be more flexible with their finances and avoid the feeling of being tied down to a big mortgage.
3. Low Maintenance
As condo monthly maintenance costs are usually dependent on unit sizes, owning a micro-condo also means that your monthly maintenance fees will be lower. Not to mention, smaller spaces are also much cheaper to cool or heat and keep lighted at night. Having a smaller space also restricts you from buying too much furniture and keeping too many things, thus saving you on more costs. Oh and one more perk – lower property taxes!
Cons of buying a micro-condo
1. Size
The biggest disadvantage of living in a micro-condo by far is its size. Living in a space-constrained place will certainly require some adjustment to your lifestyle and living habits. The unit will have to be designed with good functionally to ensure that you would be able to make full use of the space; think bed frames stored in the wall, swivelling dining tables hidden within the cabinetry and hidden nooks and crannies for household items.
2. Financing
As micro-condos are not yet mainstream, you could face difficulty when securing financing for a unit. Most banks have a minimum square feet requirement for a loan as they do not want to take on the risks for these units, fearing that they could be tough to resell later on. Prospective micro-condo buyers should do their due diligence with their financing options before proceeding with any purchase.
3. They Aren’t Future Proof
Simply put, micro-condos are not future proof because of the size. While these units may still be bearable for a couple, if you do plan to have a family, these small spaces might not be conducive at all for a baby. So, if you do intend to have children in the future, you will have to put a bit more thought into your home planning.
So, are micro-condos worth it?
If you are single and are tired of paying rent or commuting to work, micro-condos can be a good option for you. As the population grows and city space gets more and more constrained, the trend of home sizes will no doubt get smaller as well. Judging by the trends in space constrained countries like Singapore and Hong Kong, it is only a matter of time before this catches on in the bigger cities as well.
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