Royal LePage Real Estate Services Loretta Phinney, Brokerage

The Risk of Buying Pre-Construction Homes

By: Loretta Phinney Team

The Risk of Buying Pre-Construction Homes

Tags: Real Estate, GTA, Home Builders, Home Buyers

For the last decade pre-construction home buyers across the GTA have enjoyed moving into homes that were already worth more than they paid for them. Recent market conditions however have forced some developers to reduce their prices, and this is coming as a shock to those who signed their contracts less than a year ago.
Today, buyers of Mattamy built homes are waiting for construction to be completed, knowing that the same home they’re having built could be purchased right now for significantly less than they paid only a short time ago.
Although real estate prices regularly rise and fall with market conditions, it usually does not impact pre-construction homes to this extent.
Other home builders have stated that the last time this type of pull-back was experienced in the pre-construction market was during the economic recession of 2007/2008.
When buying a pre-construction home it is important to know that the price becomes locked-in once the contract is signed, transferring the risk of a market pull-back to the buyer, even before any construction has begun.
In response to this housing environment Mattamy Homes president stated that buyers should remember their homes are long term investments, and not to worry about short term market down turns.