Developers are pumping out studios and one-bedroom condos in the Toronto region, even as demand for the smaller units has plummeted during the pandemic.

Ever since the COVID-19 pandemic forced many office workers to work from home, demand for bigger living spaces and backyards has exploded, with house sales jumping in most of Canada. But the fact that homebuyers want more room hasn’t changed developer plans, at least so far.

Of the new condo project launches in the Toronto region this year, studios and one-bedrooms account for 61 per cent of the new units, according to new data from Urbanation Inc. Two-bedrooms make up 32 per cent, while three-bedrooms, penthouses and other larger spaces make up the balance.

That 61-per-cent share is higher than in 2019 and 2018, as well as the record year for project launches in 2017. That year, smaller units made up 48 per cent of new product; the residential resale market was surging, developers went on a building spree and the price of a condo (per square foot) rose a whopping 30 per cent amid speculative buying.

Today, cost is the main reason developers continue to build smaller units. With construction and development expenses rising, a pre-construction studio in the downtown entertainment district will run in the high $500,000 range, a one-bedroom mid-$600,000 and a two-bedroom in the high $800,000 to low $900,000, according to some developers.

“At the end of the day, the price point and sticker price is what drives our market,” said Scott McLellan, a senior vice-president with Plazacorp, which is building condos in the Toronto region. The majority of Plazacorp’s units are studios and one-bedrooms.

A flurry of condo projects is now being completed, just as the work-from-home movement has made it easier to live outside major employment centres like Toronto, and caused a major shift in homebuying.

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