When it comes to luxury living in the GTA, condominiums are a viable option. There are many benefits that come with living in a condominium, such as living within a community and having maintenance taken care of. The main difference between buying a pre-construction condo versus a resale condo is that you have to wait some more time before you get to move into it. But it still offers the same sense of community living and harmony as a regular condo.
Condos are one of the safest investments. The value of your condo will continue to increase until you choose to resell it. There are many opportunities for you to get the most money back from your initial purchase. Toronto real estate has done significantly well over the past few decades, so in terms of the patterns we’ve seen, if you’re investing with a long-term vision, you may do very well.
Rising Markets of the Post-Pandemic
As a result of this pandemic, every Canadian city is quickly growing. This makes now a great time to invest in purchasing a condo. The current market ensures a great return profit on your investment unit as the market value of condos is growing at exponential rates. Since new condos are quickly appearing in most major Canadian cities, it is a smart strategy to use a condo to get your foot in the door of real estate.
Matt Elkind, Managing Director at Connect said, “We’re seeing the market come back to life. Now that people know that there’s a cure and there’s that certainty because rates are at all-time lows, people are confident about where the market is going. And as soon as the borders open up, we’re going to see a real, real increase in rental demands as well.”
Pre-Construction Condo versus Resale Condo
There are many perks that come with owning a condo, so once again, Toronto’s preconstruction condo market is hot. Pre-construction condos are very desirable right now because of the advantages that come with them. For example, with this type of condominium, you receive the on-sale price before the condo is even constructed. This means that the price you’re paying is less than that of those who are buying a new condo post-building phase.
“You know if you’re buying today you’re buying an asset. You’re buying something in 2025 but at a 2021 price,” Elkind said.
Because of this, the market value of your condo is already growing and working for your benefit. Therefore, many people prefer purchasing condos during the construction phase because it’s cheaper than buying a resale model.
“It’s a very passive investment,” says Elkind, “you don’t have to deal with tenants and there’s nothing that you need to do until the condo is ready.”
Another advantage of a pre-construction condo is that you tend to be given some say and freedom when it comes to designing the interior. Since the condo hasn’t been built yet, you can choose your own specific finishings and pick a floor plan. Typically, you have the chance to add your personalized ideas and touches during the building process.
What to Know before Buying a Pre-Construction Condo
It is important to know all the different sides of what goes into purchasing a pre-construction condo so that you can make an informed decision before you commit. Buying a condo is a big financial investment that can bring you great returns, but you must understand how this part of real estate works. The first thing to know about this type of condo is that it’s not built yet, you will make the purchase based on a visionary understanding of the final results of the building and the suite. Condos differ from freeholding properties because you will also be paying for upkeep, amenities, and maintenance.
Let’s take a look at 6 questions you may have before purchasing a pre-construction condo:
1. Can I be sure of the condo that I will get?
a. Deciding to buy from a trusted and respected builder, preferably with finished projects to show and years of experience guarantees that you will receive the suite you envision and top-quality building amenities. You don’t have to be afraid that your purchase won’t match the vision you have when you partner with a trustworthy developer.
b. Take your time to ensure that you are confident in the pre-construction condo you want to purchase. Familiarize yourself with the developer and their company, you can even analyze other developments from the same builder to gain an understanding of their brand and a feel for the environment and style to see if you are compatible.
c. Examine the floorplans, finishes, and amenities and even take a virtual tour. Ask all the questions you need until you are confident to make your decision.
2. Do I have to pay the deposit all at once?
For a Canadian buying from a builder, the typical deposit for a pre-construction condo is 20% of the purchase price. Depending on the price of the condo, this can be a steep price for some to give at once. Fortunately, there are quality developers that may not require a lump sum payment, if that is a difficult task for you. If this is the case, payments are usually spread out over a period of time. It can be beneficial to connect with the sales representatives of your prospective builder to understand their policies, as well as other rules they may have in place to approve a security deposit and to protect against fraud.
3. If the development folds, will I lose my deposit?
While it is possible for developers to file for bankruptcy, the risk is relatively low. But to protect the buyers, Ontario has instituted the Tarion Warranty Corporation. This warranty significantly decreases the financial loss, if, in the highly unlikely event, the condo project is not completed.
4. How long do I have to wait for the condo to be ready?
It is a widespread misconception that you may have to wait decades before you can even claim a finished condo. This occurrence is very uncommon, especially when you are buying from a trustworthy and reliable developer. Most pre-construction condo purchasers only wait between 6 months to 2 years for their condo to be ready. Although some delays may happen that are out of the builder’s control, most reputable condo developers strive to remain as close to the development timeline as possible.
5. Are preconstruction condos even affordable?
In many instances in Toronto, buying a pre-construction condo can be a more desirable and affordable option than purchasing a freehold home. The Globe and Mail explains that many first-time buyers have turned to the condo market because of greater affordability due to an abundance of supply.
“The single-family home market has become unaffordable and that’s the reality for markets such as Vancouver and Toronto.” According to the National Bank’s chief economist, Stéfane Marion.
To understand if buying a condo is an option for you, connect with a sales representative from your desired developer. Visiting the developer’s website is a good way to determine is their pre-construction condos are affordable to you.
6. Will I be billed unexpected expenses?
Buying a condo comes with the total cost of ownership, as well as closing costs. Closing costs can include legal fees, warranty fees, administration fees, development levies, and transfer taxes.
A reputable developer will disclose all closing costs to you. They will make known any extra fees in the cost of the suite so that they may be included in your mortgage payments. When you are comparing prices, be aware that a higher priced suite may be so because all the costs are included in the price to prevent any surprises at the end.
Pre-Construction Condos Available with Dunpar
As a trustworthy and reputable developer with over 40 years of experience, Dunpar offers homes built and designed with exceptional quality from the inside out. They have exciting new projects in highly sought-after locations in Toronto that make great investments.
Lambton Towns is their newest development located in the vibrant St. Clair Avenue West. The collection of 96 back-to-back townhouses at 2650 St. Clair Ave. W. provides a rare opportunity to enjoy lowrise living in this up-and-coming neighbourhood. Dunpar continues its tradition of bringing thoughtfully designed and well-constructed residences to vibrant communities with this collection of 96 luxury back-to-back towns.
