Pre-Construction vs Resale
Everyone probably knows someone who made a load of money doing nothing with pre-construction. When pre-construction started, developers often sold at prices that were equivalent to what you could buy an existing condo for. In the four or five years that you waited for the condo to be built, the prices went up and when you took possession of your unit, you were sitting on a tidy profit.
Since then, developers have gotten wise to this and decided they would like some of those profits. As a result, developers now anticipate future gains and price that in to their pre-construction prices. So, can you still get a good deal pre-construction or has the pendulum swung to the extent that you’re better buying an existing unit?
We looked at some of the pre-construction projects available at the moment and compared them to resale units in similar areas. Per sq ft prices are approximate and will vary according to unit size.
Scout – $946/sq ft
Stockyards – $985/sq ft
Junction House – $1169/sq ft
Junction Sq – $1300/sq ft
We then looked at some resale units:
A One Bedroom at 60 Heintzman – $939/sq ft
A Two Bedroom at 1 St Johns – $776/sq ft
A One Bedroom at 2495 Dundas St – $1,052/sq ft
A One Bedroom at 15 Windermere – $870/sq ft
A Two Bedroom at 385 Osler (Scoop) – $873/sq ft
Generally speaking, resale condos are selling for less than pre-construction. That doesn’t mean that resale is definitely a better option for you. Pre-construction still has advantages: when you take possession, your unit will be new so you shouldn’t need to worry about renovations or repairs for a while. From the time you put down your deposit to when you take possession, you won’t have had to worry about mortgage payments, tenant issues or anything else that goes along with being a landlord. And there’s always a certain cachet associated with a new building.
The most important thing is to be armed with as much information as possible and we’re more than happy to guide you through that process. We’ve bought both pre-construction and resale for investment so we approach every opportunity with an open mind!