@Sayra, fantastic insight, and something that I have been interested in for a long time.
With the plethora of pre-construction sales in Toronto going to investors and people buying 3-years out, I have always believed that the market is being under supplied in the larger suites.
The issue is that buildings are being designed for people who will be buying a future, not for the people that need an immediate place to stay. As such, the suites are all small.
Typically, condo buyers buying pre-construction are not thinking, "hmmm.. in three years I might have a child and a spouse, and thusly I should be buying a larger suite". Due to this building are not built for the "after construction" market.
IMHO, people buying larger two-bedroom suites in pre-construction will do very well in the future.

This is an interesting subject that many are talking about and are trying to wrap their heads around. As the 'Gen Y' cohort enter the real estate market and ultimately form households and have families what will their housing preferences be?

I think that many will choose to move out of their apartment condominiums and look for a larger home (either single family, side-by-side or townhome). Some will opt for the new suburbs and some will choose to live in a mature infill neighbourhood. The gen Y's are diverse and with that maintain diverse housing preferences.

I think the real challenge will be creating larger apartment condominiums that are 'affordable' for the proportion of the market who want to raise a family in a highrise community.

Another thing that developers/builders must do to attract families is incorporate more 'family friendly' features such as playgrounds, green open space areas. If the amenities aren't there, families will go elsewhere.

^^But, if you try to sell that in preconstruction, will preconstruction buyers bite?
We know that it is always the 3-bedrooms, penthouses, and larger suites that sell last... very last.

For me so far this year all of my clients have required a minimum of 1,000 sqft and 3 bedrooms, if 3rd bed is not available, they will also consider a den that can fit a single bed.

@Manny: Are your clients buying preconstruction or resale?

Matthew said:
@Manny: Are your clients buying preconstruction or resale?

Good question, so far none of them want to even talk about pre-construction, they say why pay the extra money for something that will be delivered in 2-3 years, when for the same price they can buy in a very good area something that is ready.

I can attest to the fact that the demand is there, and the supply is not!!
The other market that larger condos appeal to, are the recently separated families whose children share residence between both parents. I have my kids with me for a full week, every other week. It makes no sense to me to pay for heating a big house, when 50% of the time there is only one person living there.
I could not find any suitable 3 bedroom condos! I had to settle on a 2 bedroom plus den, and have just finished converting the open concept 8 ft by 8 ft den into a bedroom. It is a actually working quite well - apart from the fact that there is no window.

I think condo vs house is a varied personal preference. Some people are adament about living in houses and others condos.

I like houses and don't like living in condos but i have a friend who bought a house and doesn't like all the maintenance and wishes he'd purchased a condo.

I was speaking with a guy last night who lives in a house in Mississauga and he refuses to move to Toronto because he wants a house with a garage and says they're too expensive in Toronto.

So, to answer the innitial question - the dream for a house with a white picket fence is half dead because half of people now want a condo.