Pre-Construction Condos

Pre-Construction Condos

Are Pre-Construction Condos a Good Idea?

The question a lot of you might be asking yourself is, are they a good idea? That can be a hard question to answer, since it’s so based on the individual. It’s been reported that the condo market is “on fire” and this is especially true within the major urban centres. The condo market has recently had a turnaround since the hight of the pandemic. 

According to some experts, this year might end up being a record-breaking year for condo sales. These experts also point out that if you’re living in Toronto or Vancouver you’ll notice “a crane on every corner.” This is very true to what it feels like downtown Burlington at the moment and the surrounding areas. 

It would seem that more and more people are looking at pre-construction condos. This is partly due to the fact that when you’re buying this type of property, you’re often offered perks and discounts. But what are the pros and cons to pre-construction? Recently, REMAX Canada created a list and we’re going to go over some of their points. 

Pros To Buying Pre-Construction  

When it comes to pre-construction condos there are lots of pros and cons. This can be true with anything in life, and it can be an important step when making the choice to make a major decision. 

One major pro to purchasing this type of property is the down payment. Coming up with the 20 per cent you need for a condo can be daunting for some people. But with pre-construction you can make pay it off over a four year period. 

Another really great point REMAX makes is that there are no bidding wars with pre-construction. “Because many units are available for purchase before the project starts, you do not need to engage in cutthroat bidding wars that add obscene premiums to the asking price.”

Another fantastic pro would be that you’re moving into a new unit, there’s nothing to replace because all the appliances are new, the floors are new, etc. In some cases you might have picked out everything yourself. Plus the value of the property would have appreciated before you ever moved in. 

Cons To Buying Pre-Construction  

Some of the cons to pre-constriction are the longer wait times, waiting for your property to be completed. Patience is important here, once you sign the agreement and pay the down payment it could take four to five years for your condo to be completed. 

The next con would be the sales tax involved, REMAX explains it like this, “there is a harmonized sales tax (HST) for pre-construction buildings because these units are brand new. While you are not paying a separate amount, the HST and the HST rebate will be factored into the price.” 

Finally, the closing costs are considered a con on this list and they usually run between 1.5 and three per cent of the purchasing price. However, when it comes to pre-construction condos it can be more. 

There are pros and cons to everything in life and it’s always important to review and examine them. Then you can make an informed decision, the help of a REALTOR can make this process easier. Lori and her team and here to help you through all of the steps of purchasing this type of property, or any type of property you’re interested in. 

Contact Lori VanDinther and Team 

Lori and her team of experienced real estate agents are ready to help you find the home of your dreams. Whether that’s a pre-construction condo or another type of property, they’re ready to help you make the right decision. 

If you have any questions about the topic of this blog or any other real estate questions, please contact Lori today. You can reach her and her team by calling 905-632-2199, or by email at info@loriv.com.

Real Estate Market Statistics for April 2022

Burlington Real Estate Statistics for April 2022

Real Estate Market Statistics for April 2022

The REALTORS® Association of Hamilton-Burlington (RAHB) reported a total of 1,298 sales in April 2022 of residential properties within the RAHB market area. These statistics include the entire RAHB real estate market area. This was a 20.7 per cent decrease in sales month over month and a 31.3 per cent decrease when compared to the same time last year. 

It was reported that there were 2,451 new listings in the entire RAHB real estate market area. This means that there was a 3.6 per cent decrease month over month and a 7 per cent decrease when compared to April 2021. 

The average price of a residential property within the RAHB market area was reported to have been $1,013,081. This was a 5.6 per cent decrease compared to March 2021 and an 18.2 per cent decrease compared to the same time last year. 

We can now review the chart below and learn more about the different areas within the RAHB market area. We can then compare the average sale price and the number of sales to the same time last year. 

Residential Market Activity 

Let’s review the above chart, Residential Market Activity, and get a closer look at Real Estate Market Statistics for April 2022. We can see what the average residential price was for a property in April 2022. This chart will also allow us to see the number of sales in each area as well and then we can compare that to the same time last year. 

RAHB reported that in Hamilton West there were a total of 62 sales in April 2022. It’s also clear that there was a decrease in sales, however, the average sale price of a residential property had an increase. The average price of a property in Hamilton West was reported to have been $827,556. 

In Hamilton Centre we also see the same when it comes to the number of sales versus the average price of a residential property. That while the cost of a property had a clear increase, the number of sales had decrease when compared to April 2021. The average price of a residential property in this area was reported to have been $680,043 and there were a total of 115 sales. 

Finally we can take a look at the Burlington area, it was reported that there were a total of 276 sales in April 2022. The average price of a residential property was reported to have been $1,228,723. Just as mentioned in the other two areas, we can see that while there was a clear decrease in the number of sales, we saw an increase in the average cost of a residential property. We can get an even closer look at the Burlington area by reviewing the below map, Average Price by District. 

Average Price by District

When we review the above map, Average Price by District, we are able to see not only the average price of a residential property within each area bit also the amount of sales. There are sub areas that we need to take note of, these areas had the greatest number of sales in April 2022, those sub areas are, 31, 32, 34 and 35.

Taking a closer look at the sub areas it becomes clear that area 35, located in Millcroft, had the greatest number of sales in April 2022. This area had a total of 99 sales with an average property price of $1,077,328. 

The sub area that had the highest average residential property price was area 38. The average price was reported to have been $1,897,500. This area had a total of 2 sales, but it is important to note that it did have the highest average residential property price. To get an overall look at Burlington’s real estate statistics for April 2022, we can now review the final chart the, Burlington Residential Table.

Burlington Residential Table

The final chart that we will be reviewing is the, Burlington Residential Table, this chart allows us to see the overall real estate statistics for Burlington. RAHB reported that in April 2022 there were total of 276 sales of residential properties. This was a 31.2 per cent decrease when we compare the number of sales to April 2021. 

New listings had a 4.7 per cent increase when compared to the same time last year, with a total of 517. The average residential property price was reported to have been $1,228,723, which is a 15.7 per cent increase compared to the same time last year.

With the median price having been $1,094,500 in April 2022, this was a 16.4 per cent increase compared to the previous year. It’s interesting to review these numbers because are able to understand the real estate market a bit better. It seems that while sales may have been lower in some areas the price of a residential property appeared to have increased in April 2022. 

Detached, Townhouse and Apartment-Style Properties

When it came to the number of detached homes within the RAHB real estate market area, there were a reported 867 sales. The average price of this type of property in April 2022 was reported to have been  $1,135,779, this was an increase of 18.9 per cent when compared to April 2021. 

Townhouse sales were reported by RAHB to have had a decrease of 27.7 per cent month over month. While they had a decrease of 38.9 per cent when compared to April 2021. The average price of a townhouse within the entire RAHB market area was reported to have been $865,862. This was an increase of 21.3 per cent when we compared it to the same time last year. 

The sales of apartment-style properties had a decrease of 15.6 per cent compared to the same time last year, with a total go 184 sales. It was reported that when it came to the average price of an apartment-style property there was an increase of 20.3 per cent, with the price being $647,411.

The REALTORS® Association of Hamilton-Burlington April 2022 Statistics 

To summarized, the REALTORS® Association of Hamilton-Burlington reported a total of 1,298 sales of residential properties. This was within the entire RAHB market area in April 2022, with a total of 2,451 new listings. We’re able to see that while the number of sales may have deceased in some areas, the average property price saw increases. 

The number of sales of residential properties saw a 20.7 per cent decrease month over month and had a 31.3 per cent decrease when compared to the same time last year. However, it was reported that the average price of a residential property had an 18.2 per cent increase when compared to the April 2021. With the average price of a property in the RAHB market area having been reported to be $1,013,081 in April 2022. 

“With the exception of last year, new listings coming to market exceed that of every other April for the last ten years. With the increase in inventory, buyers are finally experiencing more choices in the market. While inventory is still below the norm, we finally see signs of a more balanced market as the number of active listings increases.The rise in interest rates has likely attributed to a decrease in the number of sales month over month in every residential property category across the RAHB market area. While average prices remain strong, and still above the $1 million mark, we did experience another dip for the second month in a row.” – RAHB President Lou Piriano

For More Information About These Statistics 

Are you interested in learning more about the April 2022 Burlington real estate market statistics? Please refer to the Burlington Real Estate Statistics for April 2022 to learn more. 

Contact Lori VanDinther and Team 

If you have any questions about these April 2022 real estate statistics please feel free to contact Lori or one of her team members. There’s a chance you might be wondering what your home might be worth, give our What’s My Home Worth calculator a try! 

Lori VanDinther and her team are ready to connect and work with you to find the home of your dreams. You can connect by phone at 905) 632-2199, or by email at info@loriv.comWe’re looking forward connecting with you and working with soon!

Canadian Housing Market

Canadian Housing Market – Five Year Outlook

Housing Affordability in the Canadian Housing Market 

It was reported by REMAX Canada that recently there has been a rise in more Canadians moving to urban areas in recent years. The question is, how will this look over the next five years? We can see that the market has changed a lot during the pandemic with rising costs of residential properties. 

In a recent survey by Leger, it was found that about 78 per cent of Canadians were clear that taxation, interest rates, economic recession, climate change, and mixed housing were reasons to not buy a home. The report also found that public transportation was another reason, all of these points caused them to be the most concerned when it came to purchasing a home. 

It was reported that in 2020, the Canadian economy saw a five per cent decline. However, the economy also saw a 4.6 per cent growth in 2021. The Bank of Canada and the central banks have been compelled to rise interest rates as the economy is rebounding from the ongoing COVID-19 pandemic. 

CIBC Capital Markets reported recently that due to the pandemic, 3 million Canadians lost their jobs and 2 million found new work. Some of this new work was with reduced hours, meaning less income. The good news is that the number of Canadians who are employed is now above what it was pre-pandemic. 

During this time some Canadians were able to experience the benefits of a recession, meaning there were extremely low interest rates. This was during the first four waves of the pandemic. What does the future hold for the Canadian economy? New immigrants will help move it forward, benefiting the real estate market. 

Immigration and The Real Estate Market 

There are a lot of incredible benefits to immigration and what it can do to help the economy. Welcoming new Canadians who are ready to work and help move Canada toward a bright future. This benefits all Canadians and the future looks bright for many who will arrive in 2022.

It was reported that Canada is expect to welcome 432,000 immigrants in 2022. This will help the demand for new housing. This demand will be particularly noticed in the Toronto and Vancouver areas. The most recent REMAX Canada survey found that 61 per cent of Canadians believe in long-term investments.

However, this is not expected to change over the next five years. The survey did find that there are still issues that are causing barriers in stopping the purchase of residential properties, such as taxes, rising interest rates and capital gains tax. 

Rising Interest Rates 

According to Benjamin Tal, Capital Markets Deputy Chief, the enemy of the housing market is not high interest rates that is good for the economy in fact. It is the pace at which those rates increase that is a big risk to housing. Rate increases at a reasonable schedule of four times a year would create a stable and more relaxed housing market over the next five years.” 

There is some anticipation that inflation is going to ease up in Q4 in 2022. If it doesn’t ease then the Bank of Canada will most likely raise interest rates, “at a consistent quarterly pace to sustain a stable economy with healthy employment and a less- heated housing market.”

Under the conditions mentioned above, housing across Canada would then remain expensive through to 2027. However, these prices would not be as hot as they have been over the last three years. When it came to Canadians who did get a mortgage in 2020 and 2021, they were able to land low rates are now at risk of higher rates. 

REMAX Canada’s Housing Report

According to the report by REAMX Canada, “while demand for housing is likely to continue to outstrip supply, resulting in high prices, under a scenario like this with a higher interest rate environment, the housing market could be stable and less heated than what Canadians have experienced over the last five years.” 

The housing market is actually more stable then people realize and according to CIBC, one third of Canadians were able to purchase a new home. However, some needed the support of family members, such a parents. CIBC reported that ten per cent were able to buy a new home due to generational wealth transfer, they then used this gift to buy their new home. 

The report by REAMX also stated, according to Tal, “each recession Canada has experienced over the last 50 years has been triggered by central banks overshooting the ideal pace of interest rate hikes. In his assessment, this is the greatest potential threat to the stability of Canada’s housing market in the next five years.” 

Immigration and The Impact on The Housing Market 

It’s true that Canada welcomes immigrants every year, adding to the economy and creating new hope for many individuals. Canada had recently committed to welcome over 400,000 immigrants to the country in 2022. These new Canadians will have higher education and can add to the economy. 

Immigration benefits all of Canada, we see it adding significantly to the economy. Immigration adds to the labour market. In the REAMX report, its noted that the system could improve by selecting immigrants that can help the chronic labour market needs. It’s mentioned that there is need specifically in the skilled trades and construction. 

According to the Conference Board of Canada, higher levels of immigration can help to benefit the Canadian economy with “greater GDP and public revenues.” The CIBC and the Conference Board of Canada have agreed that there needs to be a minimum of 400,000 immigrants annually in order to help sustain the Canadian “economic vibrancy.”

Though this formula can be pretty complicated and often it doesn’t look at individuals who already reside in Canada. Those individuals are often students who are in temporary housing. We still need to take note that these factors will help the economy and the housing market.

According to the REAMX Canada report, it can take ten years for immigrants to have earning that are constant with their work experience and skills. This is in comparison to Canadian born workers, therefore it’s the result of Ottawa’s attention on immigrants who can be of economic benefit and have better support systems. 

Taxation and It’s Impact 

Finally we’ll discuss the impacts of taxation on the real estate market. According to the REAMX Canada report, in order to better manage the ballooning deficits and add to the cooling Canadian housing market. The federal government might remove the capital gains tax exemption, this was for principle residents in the next five years. 

The report stats that, “given the ballooning federal deficit sparked by the pandemic, speculation has increased that Ottawa could remove the capital gains tax exemption on primary residences. If this scenario was to transpire in the next 12 to 24 months, even in a modified or hybrid manner, it would upend the retirement plans of millions of Canadians who plan to cash in on the full gains from the sale of their principal home to fund their retirement.” 

According to Jamie Golombek of CIBC Private Wealth, “the primary homes of Canadians represent the greatest store of value for most homeowners and removing a significant portion of that value by eliminating the exemption could cool the market in profound ways.” 

So what’s next for the Canadian housing market? We will need to wait and see what these policies and with the welcoming of new immigrants in 2022. The next five years we will need to watch see if this current federal government will choose to apply the capital gains tax on primary residents. Resulting in a softening “the blow to the market by making it prorated based on how long the property has been owned or based on the value of the home.” 

Contact Lori VanDinther and Team

Have any questions about the Canadian housing market? Lori and her team are here to make sure that you’re questions are answered, plus they can start the process in looking for your new home. Whether you’re looking to downsize or expand, Lori and her team are ready to make the process an enjoyable one.

Please feel free to contact them anytime either by phone at 905-330-2002 or by email at info@loriv.com. If you’ve ever wondered what your home might be worth we have the technology to help you figure that out, try our What’s My Home Worth calculator today.