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Are Pre-Construction Condos a Good Idea?
The question a lot of you might be asking yourself is, are they a good idea? That can be a hard question to answer, since it’s so based on the individual. It’s been reported that the condo market is “on fire” and this is especially true within the major urban centres. The condo market has recently had a turnaround since the hight of the pandemic.
According to some experts, this year might end up being a record-breaking year for condo sales. These experts also point out that if you’re living in Toronto or Vancouver you’ll notice “a crane on every corner.” This is very true to what it feels like downtown Burlington at the moment and the surrounding areas.
It would seem that more and more people are looking at pre-construction condos. This is partly due to the fact that when you’re buying this type of property, you’re often offered perks and discounts. But what are the pros and cons to pre-construction? Recently, REMAX Canada created a list and we’re going to go over some of their points.
Pros To Buying Pre-Construction
When it comes to pre-construction condos there are lots of pros and cons. This can be true with anything in life, and it can be an important step when making the choice to make a major decision.
One major pro to purchasing this type of property is the down payment. Coming up with the 20 per cent you need for a condo can be daunting for some people. But with pre-construction you can make pay it off over a four year period.
Another really great point REMAX makes is that there are no bidding wars with pre-construction. “Because many units are available for purchase before the project starts, you do not need to engage in cutthroat bidding wars that add obscene premiums to the asking price.”
Another fantastic pro would be that you’re moving into a new unit, there’s nothing to replace because all the appliances are new, the floors are new, etc. In some cases you might have picked out everything yourself. Plus the value of the property would have appreciated before you ever moved in.
Cons To Buying Pre-Construction
Some of the cons to pre-constriction are the longer wait times, waiting for your property to be completed. Patience is important here, once you sign the agreement and pay the down payment it could take four to five years for your condo to be completed.
The next con would be the sales tax involved, REMAX explains it like this, “there is a harmonized sales tax (HST) for pre-construction buildings because these units are brand new. While you are not paying a separate amount, the HST and the HST rebate will be factored into the price.”
Finally, the closing costs are considered a con on this list and they usually run between 1.5 and three per cent of the purchasing price. However, when it comes to pre-construction condos it can be more.
There are pros and cons to everything in life and it’s always important to review and examine them. Then you can make an informed decision, the help of a REALTOR can make this process easier. Lori and her team and here to help you through all of the steps of purchasing this type of property, or any type of property you’re interested in.
Contact Lori VanDinther and Team
Lori and her team of experienced real estate agents are ready to help you find the home of your dreams. Whether that’s a pre-construction condo or another type of property, they’re ready to help you make the right decision.
If you have any questions about the topic of this blog or any other real estate questions, please contact Lori today. You can reach her and her team by calling 905-632-2199, or by email at info@loriv.com.
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