Rising presale condo costs make resales a better deal: study

A shortage of new condominiums and townhouses is looming in Metro Vancouver as soaring costs of new construction have chopped presales at new project launches and put several planned developments on hold.

For buyers, this means that resale condos may represent not only lower prices but the only option in some markets, according to a new study.

“Construction costs of residential buildings grew by 25 per cent year over year in the first quarter of 2022,” noted Engel & Völkers in its Mid-year 2022 Luxury Real Estate Report. “These rising costs are trickling down to consumers and contributing to increases in new home prices. Higher material costs combined with government regulation are creating real and present pressures on new home building in Canada.”

Metro Vancouver is seeing the results.

Starts of new condo apartments fell 41 per cent in 2022’s first seven months compared with the same period in 2021, according to Canada Mortgage and Housing Corp., while starts of new strata townhouses fell 24 per cent in the same period.

Read the full article HERE

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