As young professionals start thinking of starting a family, the norm has been to trade the downtown condo for a larger home with a spacious yard and a white picket fence. 

But that dream is remaining just that — a dream for many who are squeezed out of pricey housing markets in cities such as Toronto and Vancouver. 

Violeta Coriea and her husband are raising their two kids, who are both under five, in a 700 sq.foot apartment in Toronto. With the family's restaurant business close by, moving to a bigger home in the suburbs doesn't make sense, but nearby semi or detached homes are rare or way too expensive:  

"We always planned to start with this [condo] and then after two years to get a home," said Coriea. "But it's been three-and-a-half years and we haven't found it yet."

In Toronto and in Vancouver — the two most expensive housing markets in Canada — the price gap between buying condos and houses is getting larger every month.

In just the last year, some expensive homes in Vancouver's west side have appreciated in value by roughly 12 per cent, while condos have only gone up 5 per cent. 

Meanwhile in Toronto, the price gap hit close to $300,000 in February according to RealNet, a Canadian property market research firm.

Urban planning

The housing squeeze has started shifting the dynamics of urban planning as families are now choosing to stay in downtown condos, and encouraging other related businesses that would traditionally be more likely to found in the suburbs — such as daycare facilities and parks.

It's also affected school planning where in general downtown schools were once facing declining enrolment, many are now seeing a resurgence

"I think what has to happen is a continuation of a trend that is just beginning," says John Andrew, an urban planning professor at Queen's University in Kingston, Ont. "People really changing their expectations about what the ideal form of housing is, and I think a lot of those families will end up remaining in condos."

The housing squeeze has also meant that developers are venturing into new markets. In both Vancouver and Toronto, developers have traditionally built smaller condos to keep prices lower and attract investors, while scarcer single family homes became even more valuable:

Now, Vancouver developer Mosaic Homes says it's seeing a growing number of buyers who want larger condos with more bedrooms as they try to move up the property ladder. 

"We've seen customers coming to us, asking for larger homes and we've been able to incorporate them into the planning of future projects," says Geoff Duyker, who does marketing for Mosaic Homes. 

Mosaic says it recently redesigned one building to make 25 per cent of the units have three bedrooms — something developers could never have made money on in the past. 

With files from Tamara Baluja