If you are considering buying a condo you may be facing a dilemma: buying a ready unit or a unit in a building yet to be completed. Former may seem like an easy choice for many. People like to see, feel and touch what they are buying, and it seems much easier to evaluate a property when it’s right there - you can take a walk around the neighbourhood, sit on a sofa and imagine your future if you get this unit. It all creates a sense of familiarity and comfort and reduces the stress of making such a big and important step as purchasing a real estate property.
Pre-construction condo buying experience is a little different. There is no finished product, moreover, in most cases, even the land where the future building will take shape is not cleared from old infrastructure. Buyers investing in Pre-construction don’t let this be an overwhelming and deterrent point. They dare to envision the future and take advantage of new opportunities the project will bring. Further, builders put a lot of effort in creating beautiful presentation sales centres, where you can see the renderings of a yet to be started building, see the colour palettes and finishes, and even walk-in model suites. Giant TV screens are playing videos portraying the lifestyle and making you feel the vibe and energy of the future tower. Most of the sales centres employ top-notch reps, who can discuss any detail about the future building and the area. You may also expect to be treated to food and drinks while browsing through the glossy catalogues.
Usually, Pre-construction projects are more expensive than the currently available properties on the resale market. Here is why. First of all, new towers are built using new materials, they have a lower overall carbon footprint and are much more energy-efficient than their older counterparts. Another thing is that the maintenance fees are usually much lower because the building is new and is still under the Tarion warranty. The third reason is that you are not required to pay the whole downpayment amount as in the case with resale properties but rather slowly pay off the initial amount within 1-3 years depending on the builder. Most builders require the downpayment of 20% spread out until the occupancy of the building. It’s a great deal for investors and first time home buyers who do not have a big lump sum to make for their downpayment. The fourth reason is that the prices keep appreciating and by the time the building is built, the properties are valued at a much higher ticket price, so the purchase already starts looking like a bargain. Some buyers actually flip the property by assigning it before taking a mortgage at occupancy.
All the above reasons make perfect sense and justify why Pre-construction sales are on the rise. Just to give you an idea, recently I stood in line from 3 am until 12 pm in order to secure the unit my client wanted. Every property is different and should be analyzed based on the requirements and objectives of the buyer. Pre-construction is definitely not for everyone.
Is it the right choice for you?
Author: Samir Khalilov