Why now is a good time to buy pre-construction

By Riz Dhanji
October 08, 2024

The real estate market, especially in the Greater Toronto Area, has always been a hot topic of conversation, and for good reason. In the past three to five years, market shifts have been driven by population growth, with most new immigrants settling in Ontario, creating strong housing demand. For buyers considering getting into the market, especially first-time homebuyers or local investors, pre-construction condos have always offered a unique opportunity to enter the market. If you’re on the fence, here’s why now is the perfect time to invest in pre-construction.

Market conditions favour buyers (at the moment)

The real estate market can be cyclical, and we are currently in a period where conditions favour buyers more than they have in recent years. In recent months, we’ve seen a stabilization in home prices, particularly in the condo sector. After several years of rapid price increases, the market has cooled somewhat, making pre-construction condos more accessible to a wider range of buyers.

Developers are also offering never-before seen incentives to entice buyers. With some projects taking longer to sell out, builders are providing flexible deposit structures, capped development charges, lowered closing costs and even upgrades or credit on closing incentives to make their developments more appealing. These types of incentives were hard to come by just a few years ago during the height of the real estate market but today, buyers have the advantage in getting more value for their investment.

Interest rates: A window of opportunity

While interest rates have been a concern for many buyers, it’s important to consider the bigger picture, and that we’re likely looking at a window of opportunity. Yes, rates are higher now than they were at their historic lows, but they are still relatively low compared to long-term averages. Economists are already forecasting that borrowing costs will start to come down faster than expected. In fact, we could see the Bank of Canada reduce its policy rate from the current 4.25 per cent to about three per cent by next July.

By 2026, the overnight rate is predicted to average 2.75 per cent, and there’s a good chance we could see five-year mortgage rates dip below three per cent by the end of that year. What this means for buyers is simple: While rates might be higher today, locking in a pre-construction condo now gives you time to ride out the current interest rate environment. By the time your unit is ready for occupancy in a few years, you could be locking in a much more favourable mortgage rate.

This is especially advantageous for first-time buyers and investors, as the extended timeline of pre-construction allows you to plan for your financial future with more confidence. If you’ve been holding off because of current rates, it might be time to reconsider.

Long-term investment benefits

Pre-construction condos are a proven way to build wealth, offering significant financial advantages. Buying at today’s prices allows you to lock in your investment in a market poised for growth. By the time your unit is completed, there’s a good chance that the market value of your unit will have increased, potentially providing you with substantial equity returns.

Additionally, new condos attract quality tenants and command higher rental rates due to their modern design and prime locations, boosting your potential return on investment if used as a rental property.

As inflation drives up living costs, real estate remains one of the smartest investments. Pre-construction condos, especially in the GTA, offer stability and long-term growth, safeguarding your buying potential.

Now is the time to seize the opportunity. With favourable market conditions, manageable interest rates and strong potential for appreciation, investing in pre-construction makes sense. Whether you’re a first-time buyer or an investor, a sales and marketing firm such as RAD Marketing can help you navigate the process and make the most of these opportunities.

About Riz Dhanji

Riz Dhanji is a sales and marketing specialist with more than $3 billion in sales and more than 10,000 condominium units sold. Notable projects include Canada’s Tallest Condominium at 80 storeys, Aura Condos and DNA Condos in King West. Riz has sold some of Toronto’s most prominent projects for builders across the GTA under RAD Marketing, and is responsible for the sales and marketing for Canderel Residential’s projects across Canada.

Have great ideas? Become a Contributor.

Contact Us

Our Publications

Read all your favourites online without a subscription

Read Now

Sign Up to Our Newsletter

Sign up to receive the smartest advice and latest inspiration from the editors of NextHome

Subscribe