Hey Investors, Stop Buying Pre-construction! (you're shooting yourselves in the foot)

[interested]

No, empty. And particularly in developments like cityplace the rental ratio would be much higher than 25%.

If you are referring to the article in I believe the Globe about 1 week ago the article was revised to read "not owner occupied" despite the initial report of 25% being empty.

I do not believe for a minute that 25% are empty and further, if they are, it is due most likely that these are investors from the Orient where an empty new condo is worth more than one lived in.

 

[neubilder]

http://www.theglobeandmail.com/repo...loses-steam-as-investors-bolt/article4457606/

 

[neubilder]

Developers will keep building until the public stops buying because there is very little incentive for them not to - even in the event of a market downturn. This is because most developers can't break ground without 75>% sold which puts most of the risk on the buyer - the builder gets paid no matter what. During the 1989 crash the risk was on the builder/developer because they built first and sold later. This time around they are grinning because they have nothing to lose.

By buying into pre-construction now you could very well be getting aboard a train is going to plunge into the next ravine.

http://www.theglobeandmail.com/repo...onto-developers-keep-building/article4466727/

 

[chad]

another thing to consider is the time and price at which the developers purchased the land. if they purchased the land smartly, they should still be budgeted to make a profit even if the market corrects.