If the economy is stalling and jobs are being cut, it may be time for you to do some trimming of your own.
No, this isn’t a column about body shaming, but let’s target the extra pounds of junk in your home, ultimately costing you money, even in a
housing market
that has seen prices fall close to 20 per cent.
The self-storage industry thrives on our obsession with consumption, and Canadians are overflowing with stuff, closing the gap with Americans, who have almost double the amount of self-storage per capita.
Companies like 1-800-GOT-JUNK?, which has more than 175 franchises in Canada, the United States and Australia, target this consumption, and a proliferation of decluttering companies has emerged to help individuals downsize.
“We’re starting to see something unprecedented, the largest generational transfer of junk as many Boomers downsize. Families are being faced with a choice: does it need to be stored or let go?” said James Alisch, chief revenue and operating officer at Vancouver-based 1-800-GOT-JUNK?
Your basement full of treasures will eventually be sold for pennies on the dollar, given away to charity, or discarded. And what it is costing you is a piece of your living space. If we value that at $1,000 per square foot, which is not unreasonable in
today’s market in Toronto,
it’s an expensive storage solution.
There is a wave of television programs built around horror stories about hoarders, but it’s really not unusual for the junk company to arrive at a house and find a room uninhabitable because it is being used as storage. Confession: I have one of these rooms.
The Ontario Municipal Property Assessment Corp. said two years ago that the province had 7.3 million square feet of commercial self-storage space, equivalent to the total ice surface of approximately 2,200 NHL rinks.
That number grew by 11 per cent in three years from 2020, and there is no reason to believe it has slowed down that much, with the only brakes hitting the market today being a slowdown in housing transactions.
Self-storage thrives during housing activity, including downsizing, upsizing, and people moving out.
Danny Freedman, interim chief executive of Forum Make Space, which has investments in about 28 storage properties from Vancouver to Quebec, said there is still major institutional investment coming to Canada.
“The tail winds are more expensive houses, leading to more smaller spaces, and people still buy stuff,” said Freedman. “There are just not the same amount of garages and basements and places for people to store their stuff.”
The storage executive said that there was a spike in usage during
the pandemic,
but it has since declined somewhat. However, with construction costs also impacting the sector, supply is also not expanding as fast which is good for rates.
“It’s not so much whether house prices go up or down but the amount of trades,” said Freedman. “There are a lot of non-economic cycle demands for storage. People die. People get married. They have babies. These are things that get people to move and get storage.”
When home prices started to rise, people just stopped moving as much. They may have had a baby, but with
mortgage costs
higher, they stayed put and made do. Commercial rentals are also about 25 per cent of the business but they can also double down on storage for temporary reasons when times are tough.
Colliers says rental rate growth has been more modest in recent months, mainly due to new supply. However, the real estate company stated that buyers remain confident in the long-term fundamentals of the self-storage asset class, which they view as resilient and cash-flow stable.
Oliver Tighe, executive vice president at Colliers, said there is no single factor impacting self-storage. Still, historically, the sector has been recession-resistant because people need it when times are bad, too.
“There has been a massive surge in self-storage construction over the last 24 months, but it is slowing now,” said Tighe, who puts the supply of self-storage at four square feet per person in Canada versus nine square feet south of the border. “The population is much more mobile in the U.S. (and in need of temporary storage solutions).”
The Colliers executive agreed that there is a direct correlation between shrinking home sizes and rising demand for self-storage in Canada.
“People think self-storage is a temporary solution, and it never is,” said Tighe, adding that average terms can be 24 to 36 months even though the consumer thinks it will be three months going in. “Almost all customers stay longer than they planned because it is easy and it’s a small cost to kick the can down the road. But people want that flexibility on a month-to-month basis for the convenience.”
Even if the condo market continues to struggle, Tighe said self-storage will still thrive because losing your home means you need a place to store your belongings. “Dislocation is a driving force of self-storage,” he said.
StorageVault Canada Inc., Canada’s largest publicly traded self-storage company, reported in the second quarter that it still is seeing annual revenue growth of 6.3 per cent despite the headwinds from the housing market.
The
Bank of Nova Scotia
said this itself storage rent index shows September 2025 rents up 5.2 per year over the year. Analysts following the sector at the bank believe that rebounding home sales will drive the market further, as will home renovations.
Moving companies, somewhat aligned with the self-storage industry, are also cheering on a housing rebound for their sector.
“People just are not moving,” said Nancy Irvine, president of the Canadian Association of Movers. “People are just not sure of what will happen economically, so they are hesitant to move.”
That compares to a pandemic when people were moving across the country as they transitioned to home-based work. “We couldn’t keep up with the work; we didn’t have enough bodies,” said Irvine.
Today, there is a glimmer of hope for movers, as office mandates are prompting people to return to cities. “We are hearing anecdotal reports of that from members,” said Irvine.
Some of those people may also be looking to put their belongings in storage as they consider shifting 100 per cent back to urban cores, and moving companies do profit from that because they will store the contents.
Freedman said storage will always be the more cost-effective option for the consumer in terms of space, compared to a larger house.
“It doesn’t even compare,” he said, noting that even renting a condo for your stuff would be more expensive than a more compact storage locker.
The lesson is really to declutter, which is why many companies see a business model for people who struggle to do it on their own.
The reality is, most people won’t, so storage might be a better option than paying today’s price for rooms full of junk. I mean treasures.
• Email: gmarr@postmedia.com
