As the market begins to rebound, some developers are finding that in order to continue with future developments, they must clear out existing inventory fast. This is being done by offering large discounts on completed projects like H&H in Yaletown, and Suter Brook Village in Port Moody. So what do these sudden discounts mean for you, the average buyer and seller?
There are a few things to remember when it comes to buying in discounted developments, beginning with understanding where the new sale price stems from. Over the past several months, most developers have been offering different incentives to buy from them. Some have offered to buy down your mortgage interest rate. Others have offered to pay strata fees for a year. Now, we are seeing the new 30 to 45 per cent off deals. These price cuts are based on the original home prices and not off previous sale prices. Most of the additional incentives will have also been discontinued.
The question on sellers’ minds seems to be how discounted developments will affect their resale value. Well, as most of you know, the market value of any home is the most the buying public is willing to pay for it. When a realtor determines the fair market value of your home, they search for all comparables in the area that are similar to yours. This means that discounted developments will bring down your property values slightly. That being said, the discounted developments will also bring a lot of publicity and interest to your area which may not have otherwise been there. This can make your neighbourhood more desirable in the eyes of the public and help keep your market values up.
What it really comes down to is that as prices begin to rise developer sales are going to be one of the best ways to get into the market and buy units you may not have otherwise been able to afford. Take advantage of these deals because as the market gains strength, such opportunities will be far and few between. If you are selling, use the added media attention and advertising from these developments to help push the sale of your unit. This is a great time to publicize how great your neighbourhood really is.
– Ryan DeLuca is a realtor with Sotheby’s International Realty Canada, and host of The Real Estate Minute on Novus TV; rdeluca@sothebysrealty.ca.
