Real Estate Slump In Toronto? Not For New Condos and Homes.

 

While the summer of 2017, particularly in June and July has shown a slight market downturn in resale homes in Toronto- pre-construction and brand new homes have been going stronger than ever.

Over 90% of homes sold in Toronto and the Greater Toronto Area in June 2017 have been newly built homes. The majority of these properties are condos or townhouses (including stacked townhomes.)

 

So, how can we explain this growth in this sector of the market?

 

We must first explain what is happening in the resale market of Toronto:

The answer might be a bit complex… Toronto home prices, particularly the cost of detached homes reached unprecedented averages. The prices were so high that the national average of homes in Canada spiked with it.

Given a strong market that spanned nearly an entire year, sellers have entered this summer with extremely high expectations for what their home is worth. With buyers becoming increasingly wary of a potential market collapse, they have become cautious as not to buy at the highest possible prices. What has resulted from this is the deadlock between buyers trying to wait out a hot real estate market in the city of Toronto, and sellers trying to get top dollar for their homes.

This odd conflict between buyers and sellers has been made more complex with the Bank of Canada interest rate hike. With lending rates between banks going up, mortgages are certain to follow. This is a problem for buyers that are priced out of the market, but also hurts their perceived chances of entering the market today.

 

This raises the question: Why Are New Homes Still Selling So Well?

New properties, particularly condominiums, stacked townhouse condos and townhomes have been selling remarkably well. Despite this, the media has been reporting that Toronto is experiencing a market cool down. So what does this downturn entail? The sales of resale homes in the city have declined from the hottest months ever, and now inventory is now at a normal level.

Essentially, new condos and homes are well known by savvy investors to be a great way to secure future property below market price. Buying in the pre-construction phase of a condo building or stacked townhouse property offers units in locations that would otherwise be the subject of bidding wars or extremely high prices.

With no mortgage until the property is built and considered ready to live in, these projects are tempting for those who are priced out of the resale market at the moment. This also appeals to investors who know that they will see a return on investment on a brand new project upon construction.

New homes are largely a secure way to get the best selection on homes in a tight market in Toronto where demand is always increasing. However, getting a new home development can be a taxing endeavor. There are a lot of terms and conditions associated with new and pre-construction properties that might be unfamiliar to an unseasoned buyer and investor.

 

How Can You Learn More About Buying A Brand New Home or Pre-Construction Property?

Zia Abbas is Toronto’s premier pre-construction and new home sales agent and broker. He can help walk you through what YOU need to know about buying a new home or pre-construction property. With over a decade of experience in this niche, you can trust Zia to get the most up-to-date information on buying this type of property.

He can help assess your needs, whether you are a prospective resident or investor in Toronto real estate he can help get the best property for you. With access to day one pricing and VIP sales through builders, you can also get the lowest prices. That same relationship with builders and development companies can help you get the best selection of pre-construction units in the city.

While pre-construction and new homes are the hottest selling items in today’s real estate market, Zia can help you get in on the best value projects. Call Zia today, or fill out a contact form to get started on your pre-construction journey.