One question must certainly be ringing in your mind. Will pre construction condo prices keep going down in 2023? The answer to this question is probably yes. Prices of houses in Canada are expected to keep going down from now up to around the end of 2023 unlike the early 2022 situation
The prices of houses are expected to go down by about 23% from February 2022 to December 2023. With the general market price going down, pre construction condos are not an exemption. So if you are that serious buyer who is keen on buying a pre construction home, you should be quite aware of this and promptly act if you have to. Some of the reasons that could be behind this price drop are as follows.
Increased interest rates
Interest rates are very crucial in the real estate market. The Interest rate usually has a direct impact on the variable mortgage repayments. When the interest rates increase, it means that the cost of variable mortgage repayments will also increase. In the end, this means that many people will end up being discouraged because of the high rates. The rate at which people will be buying homes and in this case, pre construction condos will reduce so sometimes, you wonder if this is still the right time to buy a house?
This is a decrease in demand and its direct consequence is a reduction in the prices of houses. Developers will have no choice but to reduce the prices because fewer people are willing to buy and therefore it does not make sense to have the prices stay up there while no one is buying. At least when they reduce the prices, they will be able to attract those who will be willing to pay the given prices. If you have ever thought of investing in a condo then you can be among these people who will take advantage of the low prices and invest in this long-term investment.
Economic recession too has an impact on condo prices
In the occurrence of a recession, the unemployment rate tends to go up. When the unemployment rate goes up, it means that there will be a fall in income which will eventually demoralize consumers from committing themselves to real estate investments, or rather they will lack the economic muscle to buy homes. This will occasion a drop in the prices because of the inability of many consumers to buy. In the midst of all this, you must be asking yourself, are condos a good investment? Condos can be a very good investment if you decide to put there your money and wait for returns. The best time to buy it is when it is at the pre construction stage because you will pay less and if you want to sell, returns will always be higher.
A change in demographics
The Population of a place can be another factor that influences the prices of real estate properties especially pre construction condos. When the population decreases, it means that the number of households will also decrease. A decrease in the number of households affects demand in a way that the demand goes down. When the population is going low there is no way you can expect demand to be high because it’s people who buy and if they are not there it means no one will buy. An increase in the average size of the household can be another thing that reduces households hence demand decreases. This decrease in demand is what will prompt the prices of these condos to go down. If you are on the verge of purchasing a condo be it in pre construction stage or newly built, you will get to see this downward trajectory in the market prices. One important factor is to analyze the risks when buying the home
For a while, there has been a low supply of houses compared to demand across various cities in Canada. When the supply is lower than the demand, prices will be high because many people are scrambling to buy homes, and therefore the market is more stable. On the contrary, when the supply of housing becomes excess it means the prices will be affected. This time round the prices will go down because there are plenty of houses in the market which makes the sellers compete as to who has the lowest price possible that will easily attract buyers. As long as the supply continues to go up, the prices of houses will keep on reducing and that is how you would see low prices for pre construction condos 2023. That is how a higher supply of housing affects the price of all investment properties in the real estate market even if they are single-family homes or condos.
Decrease in mortgage availability
A Decrease in mortgage availability could also be another cause for prices to go down as 2023 comes closer. A decrease in mortgage availability is usually occasioned by the unwillingness of lenders to lend. This can be so demoralizing to the potential home buyers but it always happens. When many people are not able to access mortgages, it means that also many people will not be able to be in a position to buy homes. This will trigger the supply to suppress the demand hence prices will go down. You should know that prices of real estate properties usually revolve around demand and supply. Mortgage availability is crucial even if you are investing in pre construction condos Toronto. If you are planning to take advantage of the falling prices and be among condo owners in Canada, G1 Homes can be of great help to you. All you need to do is just reach out to them and you will not regret it.
Now that you know the prices of pre construction condos are going to keep dropping, it’s upon you to make good use of this opportunity. Making good use of this opportunity simply means that you get out there in the market and purchase. Remember one sure place that you can visit and not be disappointed is G1 Homes. Here, you will surely get the best of the best. Seek their services and you will have every reason to smile as far as buying a pre construction is concerned.