There are definite pros to investing in pre-construction condos.
Choose a condo that fits your goals and taste
Buying at the pre-construction stage offers buyers a lot more choices – from selecting the right floorplan, to the floor and exposure. Unlike resale, where only get to choose from what’s listed on the market at that point in time. Appliances and finishes will be old and likely dated. Wear and tear will mean renovations will be needed, and the lifetime of appliances will be shorter. During the later construction stages and just before occupancy, buyers get to select specific interior finishes and customize to their preferences. YOU pick the colours for everything – the kitchen cabinets, tiles, floors, bathroom tiles and floors. Choose from the builder’s selection of both standard or upgrade packages and design your own dream condo. Upon closing, new condo owners get everything untouched and brand NEW.
Buy at today’s pricing and lock in ROI
Historic market performance has proven new construction condos deliver solid, reliable ROI. For example, in 2014 condos were selling around $600/ sqft in Downtown Toronto, and today resale is close to $1,000/sqf – that’s a 67% increase! Interestingly, pre-construction condos are typically sold at market rates, matching current resale values. However, price appreciation once construction is complete is considerably more relative to comparable resale condos.
Continue to build equity between purchase and closing
Most resale purchases will require you to pay anywhere between 50% to 100% at contract signing. Pre-construction condos on the other hand have a more flexible and extended deposit structure. You can typically deposit between 15% to 20% to lock in your purchase. Further, the deposit is collected in instalments over the first over 18 months, broken down in to 5% payments with the final 5% to be paid on occupancy. With the right purchase, you get the benefit of full price appreciation on closing, leveraging your initial 15% to 20% purchase deposit. This also gives you the advantage of more time to save, and the opportunity to invest the remaining capital elsewhere. The deposit structure can vary by Developer and project, you can always ask for an extension or negotiate an alternate structure.