To Buy or Not to Buy, Pre-Sale Condos
November 13th, 2008Seems that the question on everyone’s mind today is whether or not to Buy real estate. Whether it be for investment or living, the uncertainty in the markets and in general has people second guessing any decision to spend money and has made it possible for everyone to be an expert on the subject. Your friends are experts, your family, the guy you talk to in the coffee shop, or my favorite, the news media.
The fact is that for the most part none of these people are experts, and for that matter, what is an expert. I would say those with the most information and insight into an particular area would be the best choice, but even then it is always going to be an educated guess.
I am going to take a stab at providing my advice on this (not necessarily expert advice, but from a informed observer and participants position). I will pick just one area for this post. Pre-Sale condos.
I would say that if you are buying today, stay away form this sector. Why?
1. Units are overpriced for today’s market and the future is to uncertain, why pay more than something is worth when you can buy something else for less than it is worth?
2. With the financial crisis and market uncertainty, many of these new developments may be in jeopardy of not being finished at all, or at least being put on hold, so why tie up your money in something that may not happen as planned, if at all, and pay too much for this opportunity?
3. There is a large selection of existing condos on the market that you can see and touch before buying, and can negotiate a fair price on, so why buy something you can’t see, can’ negotiate on, and may not be built?
In summary, The real benefit of buying a pre-sale has been that you get something new at a price that gets you in the market with a small deposit, you are securing a place for the future at today’s cost. This made sense in an ever increasing market, but today it does not make sense. All the benefits today are with existing condos. If you want something new, wait for the new developments to finish, then buy one of them. You will be able to see what you get, and you will pay a price that makes sense at that time.
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