It was recently reported by CTV that house sales rose by 56% in the Lower Mainland from January to February. People are so eager to buy that houses have been selling for way above the asking price. One home in Shaughnessy sold for $1.2 million above the listed price, which isn’t even an anomaly right now. Another home in East Vancouver received 21 offers and sold for $600,000 over the asking price. With everyone looking to buy and not enough homes for sale to meet the demand, is now the time to buy a presale property in Metro Vancouver?
What Has Stirred This Recent Spike in People Buying Homes?
A Low-Inventory Market
In a nutshell, everyone wants to live in Vancouver but there aren’t enough homes to buy. So, we’re in a sellers’ market. If you’re holding a property you could cash in bigtime. But as a prospective home buyer you are not at an advantage.
With economic uncertainty surrounding inflation, people are looking to buy in order to avoid holding cash if that cash starts to decrease in value. If you buy a home for $1 million on a thirty-year mortgage, but over the next thirty years $1 million becomes a significantly smaller amount of money relative to your holdings, you’ve essentially gained substantial capital by living in a home you would be in anyway. With inflation, you may be able to sell that home for a cool profit in just a few years.
Why Buy A Presale Property Now?
Despite the expense, Vancouver is an excellent place to buy property. The UK-based insurance company CIA Landlord recently published a study that found Vancouver as the best place to buy real estate for young people. The study took into account the cost of buying a property, utility costs, jobs per capita, average salaries, and general happiness and quality of life. So, if you can get onto the property ladder in Metro Vancouver as a young person, you should.
You’re a first-time buyer who wants a home but there are few available at a reasonable price. It might be ideal if you could secure a property now paying the deposit and completing on the property in years to come when you can afford it. So, what’s the remedy for this situation? A presale.
With everyone buying properties in Metro Vancouver, there is a scarcity of homes for sale and many properties are currently seeing multiple offers. So, if you want to buy in a year’s time there may be limited choice. With a lack of properties and high demand, Vancouver real estate prices may have spiked and you’ll be the one looking sadly at high price tags. Or, you can have your own home waiting for you down the road at a fixed price. You’ll essentially be riding the wave of rising house prices in the Lower Mainland, building up equity without having to pay over the odds for a home.
With a presale you can make a down payment instead of a full deposit. You pay the remainder of your down payment over time and have additional time to save. Then you wait a year or two and start making payments on your brand-new home once it’s built.
When your presale condo is completed you will have an incredibly valuable asset on your hands. A brand-new home in a sellers’ market is quite the commodity. You can lock in your purchase price before the real estate price rises and inflation devalues the Canadian dollar. In a rising market, that means it will likely have already increased in value by the time you move in, so you’ll already have a return on your investment.
If buying a presale condo in Metro Vancouver might be a good fit for you right now, we would love to help. We’ll help you find a presale in Burnaby, Vancouver, Surrey, Richmond or further afield. You can look through what’s available here. If you have any further questions, reach out directly.
Lynn Le Drew PREC* at 604-346-6801 or EMAIL
Colin Gatward PREC* at 778-228-3622 or EMAIL