Buying new condo developments in Toronto can have several benefits. Early birds can take advantage of cheaper early bird pricing. Most developers release their units in batches and raise prices for each new group. The spread between the first and last batch of units is usually five to twenty percent. If you buy early, you may get a cheaper apartment, but it might not be better. Sponsors include the most desirable units in each batch and usually save the best units for the last.
The first major advantage of purchasing a pre-construction condo is its immediate appreciation. Its value rises in a short period, compared to many years for an already-built property. Furthermore, the deposit can be paid in instalments, staggered over the first year of ownership. The most popular schedule involves five per cent at signing and the balance cashed upon occupancy. The other payment schedule includes one instalment every year after that. A buyer can also choose to pay $1000 per month over the first five years of ownership, earning them a further 5% appreciation.
One of the major benefits of buying a new condo development is the lower price. Many developers release their units in batches, raising their price each time. As a result, early buyers often get a better apartment, but not necessarily a lower one. Sponsors typically include the most desirable units in each batch, saving them for the last. This makes them a good investment for buyers who want to purchase a home at the lowest possible price.
Cooling-off period for buyers:
In Ontario, pre-construction condominium purchasers are entitled to a ten-day cooling-off period. However, many people don’t know how to use this time properly. Here are some tips. First, always notify the developer in writing about your intention to withdraw. Second, review the contract carefully and note any questions you have. Third, consult a lawyer, especially if purchasing a condominium in a new development. They can help you identify a bad deal and ensure that your rights are protected.
If you’re thinking of buying a condo development, down payment requirements can be tricky. Typically, lenders will want to see that a buyer can secure a loan and put down at least 20 percent. If you cannot meet that down payment requirement, a condo development may turn you down and won’t even negotiate with you. Interestingly, down payment requirements tend to be tighter during economic downturns, as lenders are more likely to fear foreclosure.