Many buyers when they are first starting out come to me and ask if they should buy new construction or something that is already built (resale). Before I guide them on any final decisions there's a lot of questions that I ask them.
When I started my Toronto real estate career 18 yrs ago, new construction was actually cheaper than resale properties. Now Toronto new condos/projects cost more than resale properties.
As I mentioned there are a lot of factors in deciding which style you should buy.
Here is a short breakdown (this list is not comprehensive…just some initial thoughts)
New construction pros:
*never been lived in
*allure of being in a cool new building with the latest amenities/features
*being able to pick your finishes
*as of right now, builders are offering many incentives
Cons:
*long wait time from sale to completion (could be numerous delays). Will you still be in the same position/desire to own what you bought years ago?
*quality is unknown
*how the building will be managed and the first two years of management and operation will take a while to sort out.
*Finance conditions could change and you could no longer qualify for the mortgage (seeing a lot of that in 2024)
Resale Pros:
*can move in immediately
*have the option to see how the building has been managed and build up a good reserve fund
*If you are going to rent it out, it’s instant revenue vs. having another company hold your down payment for 3-5 years.
Cons:
I really don’t see any cons to buying resale condos. It more becomes a discussion around do you want a condo or home?
If your final decision is new construction it’s important to make sure that you have your own agent because the person selling the new construction project is working for the Builder and so you are not protected in the same way as if you had your own agent representing you. And the agent will help advise you on pitfalls to avoid. It’s important to remember that not all projects are created equal, not all Builders are equal and not all final products are equal. In fact not all projects even get off the ground. The Toronto Star recently reported that Tarion, the province’s administrator of new home warranties, is facing its “largest claim event in history” due to an increase in cancelled pre-construction projects. Which could mean some financial losses for these buyers.
Another common misconception is that anyone can walk into a sales center and buy a new condo. Many projects, especially in the city of Toronto, don’t make it to market (meaning they sell out so the general public doesn’t have an opportunity to purchase them). Thankfully one of my colleagues at SAGE is very well immersed in the new development world, so we have access to projects and properties that may not become available to the public.
If this is something that is of interest to you, because new construction can be very exciting and sexy, I encourage you to book a call on my website so we can talk about what the best option for you is and how to ensure you are most protected.