For eleven months, Lia Cosco had a place to call home in Vancouver — all 26 square metres of it.
A one-room cubbyhole little bigger than a pair of parking spaces, it featured a microwave and a stove top — no room for an oven — and a bed that folded away so she could sit at her kitchen table.
But Ms. Cosco was happy to hand over $1,000 a month for her "cosy micro-condo" in the city's historic Gastown neighbourhood because, despite a healthy gross income of about $58,000 a year, she had little other hope of ever affording to buy in the pricey West Coast city.
Statistics Canada's latest census data shows that high-rises have sprouted up across the country, with the stock expanding 10.7 per cent between 2006 and 2007. In Vancouver, the market is on fire to serve people like Ms. Cosco, expanding 24 per cent in five years.
"I was looking for a place and I couldn't afford $1,200, $1,300 a month just for renting, or $1,600 for a lot of places," said Ms. Cosco, 33, who works full-time as an international student administrator at Vancouver Community College.
Detailed information from Statistics Canada won't come until late next year, showing how much of the growth in housing stock is linked to condominiums and rental housing, and how much the boom has driven up costs and crowding.
So far, the data show that most people still live in single family homes. About 55 per cent of all housing in Canada is this type of dwelling, about the same as in 2006. High-rises only make up a tenth of the country's housing stock, despite the fast pace of building.
But that's less true in the big cities. Toronto and Vancouver in particular have seen double-digit expansion of high rises and a more moderate rate of growth in single detached homes. Now, more than a quarter of Toronto homes and 15 per cent of Vancouver dwellings are in high-rise buildings.
When her 30-unit rental development began offering furnished condos ranging from 21 to 27 square metres, Ms. Cosco jumped at the chance to move in — then moved out just as fast when a new housing development offered condos below market value to middle-income Vancouverites.
With her master's degree and full-time job, Ms. Cosco is part of a new urban definition of "affordable housing" in Canada. She bought the condo for $195,000 — about half the market value — as part of a deal the developer made with the city to offer the homes for no money down.
"Who would have thought that my poor ass could actually buy a place in Gastown?" she marvelled. "It's insane."
In Vancouver and Toronto, two Canadian cities that regularly make international lists of the world's most livable cities, a middle-class income will barely buy you a parking spot.
The average price for a single family home in Greater Vancouver in July was $950,600, and in $525,100 in the Greater Toronto Area, according to the Canadian Real Estate Association. The average price for a condo that month in Greater Vancouver was $374,300 and in Toronto $295,200.
"I don't know how all the young people down here are affording to live here," Ms. Cosco said.
"I think more people are renting and having roommates for longer. The 30s are the new 20s, and people are roommating into their 40s.... or they're working two jobs or they're doing whatever they can."
It's people like Ms. Cosco — first-time buyers in those two cities — that are feeling the effects of new federal mortgage rules that took effect last month. The maximum amortization period dropped to 25 years from 30 years for government insured mortgages, and the federal government also tightened the standards lenders must apply before granting a mortgage.
The changes also mean borrowers refinancing their mortgages are limited to 80 per cent of the value of their home, down from 85 per cent.
"The whole point of the rules is to make it more difficult to get a mortgage, to make it less risky. And so it's going to hurt and who is it going to hurt? It's going to hurt the people it's always hurt — young people," said Ian Lee, a professor of strategic management at Carleton University in Ottawa.
The government must find a balance between making it too easy — "then everybody floods into the market and you create a bubble like the Americans did" — and making it too difficult, said Mr. Lee, a business consultant and former mortgage manager for the Bank of Montreal.
The rules don't mean the people affected will never buy a home, he added.
"It just means they have to wait a little bit longer and save up some more down payment. The good news is they've got lots and lots of time ahead to go out and get another job that pays more money or get another part-time job on top of your first job or just save up more money."
That will cool down the too-hot markets of Vancouver and Toronto, "and that's a good thing," said Lee.
"Five per cent down on a house in the Maritimes where you can get a house for $80,000, or in northern Ontario, isn't very much money. Five per cent on a house that' a million in Vancouver is whole lot of money. It's just a numbers game."
That's the price people pay for living in the two Canadian cities that, like New York and London, attract international buyers who price locals out of the market.
Gregory Klump of the Canadian Real Estate Association said there was no big change in sales numbers in the first month of the new rules. Vancouver and Toronto had already seen a softening in their markets, he said.
"You've nibbled at those people who were pushed to the very edges of affordability," said Mr. Klump, who called the changes a "measured response" to an ongoing concern.
"This is a blunt instrument, and it was a judgment call."
First-time buyers represent a linchpin segment of the market, because without them, the market would cease to exist, he added. Tempering their expectations "is going to have knock-on effects throughout the market, and do what the finance minister hoped it would do, and that's cool price increases."