TITLE: Preconstruction Market in Toronto
Investing in the preconstruction condos or townhouses has been recently a trend not only in Toronto and Canada but in many other cities over the world. Previously such an activity was considered to be rather risky, though this has changed over the years. More people tend to invest in preconstruction real estate property now for many reasons.
The global pandemic has significantly impacted the world economy, including the real estate sector. Due to the instability in the market, the sales have dropped in 2020, so did the number of homes planned for construction. As for the consumer demand, it has changed but not decreased.
We all know that strict rules aimed to fight coronavirus made people literally locked in their homes. City habitants have experienced the effects of the lockdown at its most when there were times with no option to walk along the urban streets. Consequently, a natural desire emerged – more people started to think of moving to the suburbs or rural areas.
As the people want more fresh air and space around, the design of homes should be adjusted accordingly. There is not much to be done about the existing dwellings, but there are lots of ideas for the future of the preconstruction sector for the next several years.
The preconstruction market 2022 in Toronto
The number of sales in the real estate market was below the expected level in 2020. This is predictable as per the general situation in the world. However, the tendency began to change in the early 2021 showing a spike in consumer interest for both preconstruction combos and resale dwellings.
The current trend is gaining momentum, so it is expected to dominate in the preconstruction market over 2021. While the strict rules and lockdown are slowly going into the past, the vaccination speed will determine the recovery of the Canadian economy. Thus, Toronto new development preconstruction market 2022 will have to align with the economic processes in the country.
As for the types of property in demand, it is expected that preconstruction townhouses in suburban areas will be of high interest to consumers. Meanwhile, the preconstruction condos will not be that popular, though this might change in early 2022 and 2023.
For the next year 2022, the number of built and sold preconstruction units would be close to that in 2019. However, the full recovery is expected only around 2024 considering that the political, economical, and epidemiological situation would be stabilized.
Benefits of preconstruction services
Nearly every third Canadian has invested in the preconstruction property at least once. Some people even do that on a regular basis – they are usually known as investors. No matter whether you are a newbie or a seasoned investor, keep in mind the benefits the preconstruction market services offer.
Property has long been considered as a smart and long-term investment. Any type of property is an estate that may be easily converted into another form of asset at any time later. However, it is necessary to consider that location and quality of the building do matter a lot.
There might be several reasons to invest in the preconstruction units depending on one’s needs and interests. For instance, business people acquire preconstruction condos and townhouse to later get profit from tenants. Parents may want to invest in preconstruction units as a gift for their children. Individuals would want to acquire preconstruction condos to get them tailored to their special requirements and preferences.
One of the outstanding advantages the preconstruction market services offer is the option to customize your future home. Even though there is a general project with predefined apartment sizes, it is possible to design the interior of your condominium based on your needs.
Before the apartment is built, you can predefine the size of the rooms, kitchen, bathroom, and other inner spaces. Some people would want to create open space between the room and the kitchen, while others prefer more walls and doors to make separate units. You may consult the designer who can help you draft the project of your dream home.
Deposit in chunks
As developers need investments for building condos and townhouses, the future homeowners need to make a deposit. Usually, the amount of the deposit is around 20 percent of the total price. For instance, if the estimated condo price is $500,000, the one would need to pay $100,000 in advance.
Some developers offer a great deal for splitting the deposit sum into several chunks called installments. Thus, an investor would have to make regular payments during the year. The conditions of payment are clearly stated beforehand, so the installment plan is set as well.
Things to consider in preconstruction market
While the above mentioned advantages predispose to investing in the preconstruction units, there is always another side of the coin. It is not about the drawbacks or disadvantages but rather about the things you should keep in mind.
Regardless of the type of the preconstruction property, an investor always has to wait. Usually, the waiting period lasts for at least several months, but in general it constitutes years. Before you select the preconstruction unit type, the developer has to inform you about the estimated completion date of the project.
Even though the investor is informed about the timing, the delays are nearly always inevitable. The average delay time is between 1 month and 1 year. However, you should always verify that by inspecting the previous projects of the particular developer. In case there were delays for years, consider another building company if you do not want to wait.
It might sound harsh and frustrating that some projects might be cancelled even when a part of the building is already completed. Such things are not common but they do happen sometimes, so you need to be aware of that.
Different reasons and factors may force a developer to freeze or cancel the project. The lack of investment, the lack of required documents, climatic conditions, and landslide are some of the reasons that prevent a building from being constructed or exploited. That is why, you need to always check the developer’s reputation and success of its previous projects.