Canada's Condominium Magazine
Especially now, with the move towards condominiums as a buyer-preference in the Greater Toronto Area — and a shortage of available listings — deciding between new pre-build and resale is often the first decision to be made. Especially for families, who require 2 or 3-bedrooms, there are typically more choices in pre-build condos. Many modern condominium developments are designed with families in mind.
On one hand: shiny new versus resale (usually requiring some renovation). On the other, “we can wait for it to be built” our way, versus a resale with character. Buying new tends to be recession-proof (buying at today’s prices, closing at tomorrow’s values) — and you can optimize your home before moving in. Buying resale means you can move within 60 days or so, but you’d be buying in today’s heated pricing market for something that will likely need maintenance and upgrades.
With new mortgage rules — new may be more attractive
One reasons new pre-build condominiums are surging in popularity are pending new mortgage rules. These new rules will have the effect of lowering buyer’s buying power by reducing mortgage size, new condos may be the best fit. Lenders tend to like new.
The time it takes to complete the project gives the new home-owner time to save for the closing downpayment when it’s complete — making the mortgage smaller in the end.
Realistically, based on Toronto’s median income, condominiums remain affordable, while detached homes are difficult to finance. [For a story on these new mortgage draft rules see>>]
Shiny and New
A growing number of people are flocking to the prebuild condo market for this reason and others. Latest technology, environmentally-friendly, and possibly safer, new condos hold a lot of appeal. Not only that, you can often customize your counters, walls, paint, floors, without the stress or renovating a home you’ve moved into — and the health issues that could entail.
People who buy prebuild tend to want the latest and newest (like the latest iPhone). They also look for new and exciting amenities — equipment and common-area facilities that weren’t even imagined a few years ago.
Nothing says new like state-of-the-art appliances. A major part of the appeal is the idea of being the first to own something, especially if the buyer is able to customize it along the way. With new, there’s no lingering history from a previous owner.
A Bit of History in the Present
On the other hand, some condo-buyers prefer a little history. To some, one of the most appealing aspects of a pre-built home is the historic value that it holds. This, however, is much less of a factor with condominiums. There are, however, some classic condominiums in highly desirable and in good neighbourhoods. They have seen sunrises and sunsets. They have seen families growing, children playing, and newsworthy events unfolding. A home’s history can make it quite appealing for many buyers.
As the old saying goes, “One man’s trash is another man’s treasure.” However, the same holds true the other way around. While the history may attract some buyers, others may be turned off by the prospect of living in older homes with less than ideal stories. Even though today, real estate agents must disclose major incidents like a past homicide, some history certainly goes undisclosed. You don’t have to be superstitious to understand that negative memories can plant themselves in your subconscious, nagging at you down the road.
Is the home situated in a bad neighbourhood, or did anything nefarious happen at the site? Is there a great deal of mold inside, or is the place falling apart? Does the home require seemingly endless repairs and/or maintenance? These are questions prospective buyers may be pondering as they make this decision.
Location is Key
While new condominiums are certainly appealing, the location may not be as ideal as a historical condo in a quaint neighbourhood. After all, the GTA is already dense with condos, retail outlets, business offices, restaurants, schools, and more. Newly constructed homes can be built further away where land is readily available — which does tend to make the pricing lower. New condos on transit lines or prime neighbourhoods, however, are certainly available — such as Tridel’s new Auberge at Leslie & Eglinton. Like any home in a prime neighbourhood, it’s reflected in the price. But sometimes, you can find that perfect mix of a brand-new condo in a really desirable neighbourhood.
Don’t break the Bank
The most important question when making the decision whether to purchase a unit in a new building versus one that is already built is the price. After all, what good is a fully-upgraded, modern home with all the trimmings if the buyer cannot afford it? Even without all the luxurious upgrades, new construction is often more expensive than pre-existing homes.
With new, instead of renovations you might have upgrades (depending on the project) which can be more cost-effective. With the extra time to closing, new can also give more time for the new home-owner to save for a larger downpayment.
Buyers who are facing a deadline may not be able to wait for new construction to be completed. When will tenants be able to move in? Does the buyer have a lease that is about to expire? If so, is (s)he able to sign another, temporary lease? Time constraints are just as important as affordability when purchasing any home. Buyers need to know that they will have their new keys in their hands when they need them.
Too many choices?
The details and planning that go into finding the ideal home can be quite overwhelming. Buyers are faced with a series of choices and questions at every turn. How many bedrooms does your household need? Do you require an extra space for a home office? Do you own pets? If so, what are their needs? Is the community the right fit for your family? Another important decision with which many buyers are faced is whether to purchase a home in a newly constructed building or one that has been around for a while. Both options have their pros and cons, and each buyer must decide which appeals most to them and their family or household.