Thanks to COVID, the condo market is friendlier than it’s been in a long time. Now might be a good time for buyers looking to buy resale units or pre-construction condos because these prices have not gone up yet.
If you’re looking for a deal and want something that you can own right away, resale is the better option at this moment. It is cheaper than new homes because some recent listings have been sold under their asking price, which means there are great values in resale now.
But, of course, that’s assuming you’ve got the cash on hand for a down payment. No thanks to the COVID-19 pandemic, many people have lost their jobs or are earning less, with hardships even affecting savings they would use for home buying purposes.
If you need more time to save up, pre-construction condos are a good choice.
Don’t have enough for a down payment on a pre-construction condo right now? Don’t worry, you can get that money together over time. There is no need to be stressed out about the low deposit because it allows you up to four years to pay in installments, with an option of 20% or more per year. That way, when your financial status improves and becomes sufficient later on, you’ll already own something.
In addition, you can save a lot of money on your mortgage because it will carry no interest for years. That means more time to find the perfect home and more options available while prices are at their cheapest.
In 2022 housing prices will be significantly cheaper than they were in 2018, so now’s the best chance to buy that dream house, especially if it has an extended occupancy period of 10 or 20 years before going into contract. Think of it as forced savings.
It’s also great if you have kids
If you’re financially struggling and looking for a way to give your kids an advantage in the increasingly expensive housing market, pre-con is a smart option. The deposit structure is more forgiving than the traditional down payment, so parents can invest without depleting their savings as much. Plus, since most buildings take some time until they get built, that means there’s plenty of time for the kids to grow up before it’s finalized.
You can probably pick up a pre-construction condo in a good location for the right price. But if your ability to buy depends on being able to get tenants at a rent that covers all of your costs, you may want to think about another alternative. In this high-inventory low-demand rental market, it won’t be easy finding renters, and there is no assurance that rents will cover their expenses without any losses.
Don’t wait on the sidelines for a perfect investment opportunity to come; pre-construction investments can be an excellent option if you’re looking for some stability and predictability. Pre-con gets you access to today’s prices, but without having to worry about carrying it through weaker rental markets that are softened by COVID.
How to succeed with a pre-construction condo purchase
Work with a reputable, trusted builder.
You’ve probably heard about the horror stories of buyers being left high and dry with a deposit that was enough when they first signed up but doesn’t cut it in today’s market. It happens! That’s why you need to do your research, no matter how cool a building sounds or what builder is designing it. If they’ve had problems before, then there could be trouble waiting for you on the other side. Stick to proven builders who are known for doing quality work.
Work with an agent that has first access to properties.
Have you ever experienced calling into a development company, searching for knowledge on one of the properties they just put up for sale? Developments often get marketed after well-connected buyers have snapped up the good ones, those who can negotiate favourable terms with agents that first access pricing and incentives.
Benefits of Working With an Agent
One of the remarkable things about working with an agent is that they can help you determine the value and decide if a property makes sense for you as an end-user or investor. Plus, agents have access to information on all available developments in your area, so there’s no need to make costly mistakes when it comes time to buy.
One place where builders don’t always give their honest opinions is during construction projects. The builder’s first interest is selling something rather than providing quality feedback and guidance. Agents can speak candidly because their main goal isn’t making sales but helping customers get what they want while staying within budget.