Reasons To Consider Buying A Resale Condo Vs Buying A New Condo
When you’re preparing to buy a condo it can be tempting to buy the newest, nicest one within your budget. But don’t let “shiny and new” syndrome fool you into making a bad investment.
As it turns out, buying a pre-construction condo can be risky for several reasons.
If the development you’ve decided to invest in gets cancelled, you run the risk of losing equity and buying power if you end up having to start over in a more expensive market.
When you consider buying a resale condo instead of a new condo there are several benefits:
- Savings on sq ft cost
When you look at the average cost per sq foot when buying a condo in Toronto, the price has increased by roughly 50% since 2016 and new condos are 14% more expensive than resale condos.
- Size of living space
Data collected by Statistics Canada shows that the average condo size in Ontario has decreased by more than 30% since the condos that were built in the 80’s and 90’s.
- Risk tolerance
No need to worry about risk tolerance because the property already exists, and you can move onto building equity with your home or investment property right away.
Part of the reason why the market has seen a surge in prices is the skyrocketing cost to build these new developments, making it more difficult for developers to turn a profit.
The market has seen a massive increase in prices followed by a cool down, causing some development plans to be cancelled.
Data from Atlas Group in Vancouver shows that 1 out of 5 development approval applications have been abandoned and an analysis by The Globe & Mail shows that the same fate may shortly await Toronto.
The report investigates condo projects launched before 2016 that still haven’t been completed, and found that “(w)hile many appear to be delayed but still on track, others bear a distressing similarity to projects recently cancelled.”
Contact me if you’re thinking about buying a condo or want to ask a Realtor about buying a resale condo vs buying a new condo.