Is investing in real estate on your list of new year resolutions? We all have learned from the disastrous roller-coaster ride of the covid-19 pandemic over the past couple of years. The sudden loss of employment, unexpected medical bills, lack of investments, and the compulsory house arrest, left people depressed, angry, terrified, and downright broke. It was a horrifying experience.
It’s a brand new year, and I bet you are more than ever focused on making your money work for you—not just working for it. So, before the train falls off the track at your finances – here is why buying Pre-construction Condos in the Greater Toronto Area is the best investment to kick start your journey to financial autonomy and security.
Why Should You Invest in Real Estate?
Investing in real estate is a game-changer when it comes to financial stability. No other form of investment continues to appreciate over the years like real estate investment. For example, if you buy a property this year, it could be worth twice the price you bought it like two to three years later. Now you can not be 100% assured of generating that kind of high return on investment (ROI) from buying into cryptocurrency, the stock market, or locking your annual salary off in bank fixed deposits.
Think about cyber security issues, risks, unpredictability, and low-interest rates. You don’t have to worry about all these when investing in real estate. You are in absolute control of your investment and your income. All you need to do is buy your property and go to bed – making money while you sleep. Talk about renting out your property for big bucks. That is a sure-fire way to earn a monthly retirement fund for life!
First, we will start with the essential facts and answer all your questions about investing in Pre-construction Condos and the advantages.
We will discuss the following:
- What is a Pre-construction Condo
- Benefits of Buying Pre-construction Condo in the Greater Toronto Area.
- The Past and Future of Real- Estate and Housing in The Greater Toronto Area.
What are Pre-construction Condos?
The term is self-explanatory; these are Condominiums (Condos) that are yet to be built. Condominiums are large residential complexes with many different units. An individual can privately own each unit. Builders sell Pre-construction Condo units early in about 3 to 4 years before the project is completed to help finance the construction.
In most cases, the developers would give you a pricing guide, floor plans, and an artistic drawing of the project to help you envision your new home and make informed financial decisions. The process of securing a Pre-construction Condo is pretty simple. You make a reservation with a small refundable fee, and a payment contract is set up, the building is constructed and inspected, then you close the sale, purchasing your unit.
Benefits of Buying Pre-construction Condos
Residents of the Greater Toronto Area are opting for Pre-construction Condos for various reasons. Below, we explain them;
You Get to Spread Out Your Down Payment
You can easily make the down payment for your unit without breaking the bank. Most Pre-construction condos require a reservation fee of between $2000 to $5000 and an initial 20% down payment to buy a unit. For example, suppose the sale price of the unit is $500,000, you need to make a down payment of $100,000. However, this down payment is guided by a payment structure that allows you to make your down payment over a specific period.
Below is an example of a deposit payment structure:
- Reservation fee of $2000 – $5000
- 5% due in 30 days
- 5% in 90 days
- 5% in 180 days
- 5% due at occupancy
Each 5% using the sale price in the example above is $25,000. At each milestone, you are paying $25,000 spread over 180 days. Some developers are willing to offer a down payment structure that can be split over a longer time, between 180 to 365 days. This is often a vital feature of a pre-launch incentive -a limited-time flexible deposit structure. The essence of this down payment structure is that it affords you time to save up for payments. Owning a home has never been more convenient, so if you have been thinking of investing in Pre-construction condos, it’s time to stop thinking and start investing in your dream home.
You Can Customise Your Home
Have you ever heard a resale single traditional family homeowner saying, “I do love the large rooms and the basement? The only downside is, I wish my kitchen counter had a granite finish, and I would have preferred a walk-in closet for our bedroom.”? Sad. Isn’t it? What is the essence of buying your own home if you cannot make it yours? With Pre-construction condos, you are the boss.
You get to customize your unit to your imagination. From granite kitchen countertops to wooden flooring and a sit-in closet, you have an array of choices. It’s your money, and you can have it your way. Do you know that you can also upgrade your unit even after you have occupied it?
If you aim to resell, you can swap outdated fittings and finishes to increase the value of your property. How cool is that?
No Extra Cost of Renovations
Ever heard the phrase, “If it ain’t broke, don’t fix it?” Well, you cannot possibly end up in a newly built condo and end up spending extra money on renovations. Broken new condos do not exist. Why? Everything is new. Investing in Pre-construction homes gives you the leverage of owning the most modern homes you can get on the surface of the planet. There is a 100% chance of landing a perfectly finished home with new and modern appliances, plumbing structure, heating systems. You don’t need to fix anything before and after moving in.
What this means is that it increases the rental value of your property. Just pick a good spot in the Greater Toronto Area, and you are on the right flight to a long-term passive-aggressive flow of income.
Condos are Cheaper (You Can Lock in Your Price)
Investing in pre-construction condos offers you a win-win situation. You get modern, new homes at a cheaper price! Why would you want to buy an old traditional home at a higher cost and still wrestle with finding renters who can afford to rent your property? Reports have shown that more Canadians and immigrants opt for the cheaper pre-construction condo as the best economic path to living in the Greater Toronto Area.
A 2021 Condominium report indicated that the total sales of new condos in the Greater Toronto Area were over 30,000 units between January 1 and August 31, 2021. That figure says a lot compared to the lower 17,760 unit sales in 2020. The cost of traditional single-family homes in Toronto is on the increase. According to the Canadian Housing Market Outlook Report, Fall 2021, Ontario has the highest average residential price increase across single detached homes in the country!
Toronto’s Average Residential Price Change
(Full year 2020 vs. Jan to Aug 2021)
If you plan to buy a property for investment purposes, pre-construction condos in the Greater Toronto Area are the best investments. It’s a cheaper option for you, the investor, and your prospective renters. Purchasing a Pre-construction Condo allows you to buy a property that would be more expensive in the nearest future, at today’s price. Once you sign your contract, the unit’s price cannot be changed irrespective of any increase in market value during the period it’s being built. Also, because the prices of the units are fixed, you don’t need to roar at anyone in dirty bidding competition. All you are doing is simply drinking some water and minding your business.
You would think you have heard it all about pricing, but here is another essential cost-effective advantage of investing in pre-construction condos. You are mortgage-free until the time of occupancy, meaning that you do not have to pay any mortgage until closing.
Live, Work and Invest in the Big City
The Greater Toronto Area can be referred to as the lifeline of the entire province of Ontario. It is no surprise that Wikipedia describes, the Greater Toronto Area “as the most populous metropolitan area in Canada.” The city hosts 6.4 million people as of 2021 – a report by PopulationU – a research paper on population dynamics and social affairs. The Greater Toronto Area is a global business, economic and financial center. Highly diverse multicultural communities, better career opportunities, exciting events, low crime rates are just a few features that make the Greater Toronto Area one of the most sort out places to live in the world.
Pre-construction Condos in the Greater Toronto Area sell out fast- almost at the speed of light. This is due to the high demand and the low vacancy rate in the metropolis. Buying a Pre-construction Condo secures you a home in an urban environment without breaking the bank. Plus, if you decide to resell or rent out your unit, getting a high offer is as easy and quick as taking out your thanksgiving chicken from the oven. Pre-construction condo investment in the Greater Toronto Area is the leading global real estate market in North America. This is the one-hit investment opportunity you do not want to miss.
New Home Warranty and Insurance
The Ontario Tarion Insurance covers all Pre-construction homes in the Greater Toronto Area. This ensures you are protected, and your investment is secured. You don’t have to worry about losing your money. If a developer fails to complete the construction project, you are guaranteed to get a refund of your expenses. Only newly built homes have this leverage, not resale homes.
Low Maintenance Cost
Condo onwers are in charge of what happens inside your unit. However, the common spaces such as pool, lawn, hallways, gyms, garages, open parking spaces, play areas, and lounges are managed by a property management company, or an owner’s elected board of directors. The main objective is to maintain shared areas, offer financial management services, and ensure the security of the complex. This reduces the maintenance cost of Condos compared to other types of housing.
Mind-Blowing Amenities and Incentives
Pre-construction homes in the Greater Toronto Area are built with extra amenities for the utmost comfort and wellness unit owners. Some essential amenities include yoga studios, massage rooms, wine rooms, large beautiful lobbies, swimming pools, above-standard gyms, saunas, and so many more. You can discard your previous gym memberships cards, you have our permission. You don’t have to jog to the town center to use a gym or a sauna anymore. Everything needed for a healthy mind, body, and soul is already in the amenity-rich Pre-construction home you are buying. Pre-Construction Condo home buyers are offered free incentives. This could be the right to sell or move into your condo before the construction is finished at zero extra cost.
The Past and Future of Real Estate and Housing in the Greater Toronto Area
In the past decade, the Greater Toronto Area’s real estate market has been everything but unstable. According to statistics published by The Toronto Real Estate Board (TREB), the average sale price of a home in the Greater Toronto Area was $431,262 in 2010. However, that number quickly rose to $819,153 in December 2019. That is a massive increase of $387,891 within 10 years. The image below clearly shows the significant changes in sales and average sale price of a home in the Greater Toronto Area over the past decade.
Sales and Average Sale Price of a Home in the GTA From the year 2010 -2021
|Year||Number of Sales||Average Sales Price|
|2010||85, 860||$431, 262|
|2011||89, 110||$464, 989|
|2012||85, 488||$497, 073|
|2013||87, 047||$522, 951|
|2014||92, 776||$566, 611|
|2015||101, 213||$622, 116|
|2016||113, 040||$729, 824|
|2017||92, 340||$822, 510|
|2018||78, 017||$787, 842|
|2019||87, 747||$819, 153|
|2020||95, 066||$929, 636|
|2021||121, 712||$1, 095, 475|
Based on the statistics above, there has been a consistent increase in the real estate market in the last decade except for a slight decrease in late 2017 to early 2019. The average sales price continued to increase steadily from the year 2020 to 2021. However, the average sales price of a home increased continuously in the last four years; that is between 2018 and 2020. This indicates that there was a significant increase in demand for housing. To make informed decisions on investing in real estate in the coming decade, it’s essential to examine the estimated values of the real estate market in the Greater Toronto Area. The Canadian Real Estate Magazine reported the average sale price across the GTA rose to $1,163,323 in November 2021 – from the November 2020 value of $955,889.
This indicates a possible growth in the real estate market in 2022 and beyond. Some factors forecast an increase in demand for housing in the next 10 years in the GTA. As more people are vaccinated against the COVID- 19 and the estimated end of the pandemic in 2022, the supply of adequate housing is sure to take a downward curve. With work-at-homes retuning to offices, students, going back to schools and, the influx of immigrants, the facts indicates there would be a high demand for suitable housing in the GTA.
The impact of this analysis is that the real estate market in the Greater Toronto Area should increase in future as developers would need to put up more buildings to offset the forecasted increase in demand — further raising the average sale prices. With more people opting for Condominiums instead of the now expensive, unappealing detached homes, there will be a high increase in demands for condos- especially Pre-construction Condos and prices will likely skyrocket. Indicating that its best to invest in the Pre-construction Condo market in the Greater Toronto Area.
Your new year goals don’t have to end in your journal. It is best to invest in Pre-construction Condos in the Greater Toronto Area now. This is not the hour to snooze on the opportunity to invest in your future. The pros of acquiring a Pre-construction Condo in the Greater Toronto Area far outweigh the cons. Furthermore, statistics show evidence of increased future growth in the market. You have absolutely nothing to lose.
Ready to invest in pre-construction? Contact Us Today!