The housing market in Canada is a topic that has often been discussed in recent times, and the text provided sheds light on some of the issues surrounding it. One of the key issues that have emerged is the role of investors in pre-con sales. Unlike in the past, where investors were not the primary source of pre-con sales, the current trend has shifted towards builders wanting their money now and selling units to whoever can pay the most money the fastest. This shift has turned housing, which is a basic human need, into an investment and has disadvantaged those who can no longer afford reasonable prices.
The text brings to light the role of the Punjabi and other Indian communities in fueling the real estate market. Real estate agents from these communities push pre-cons as the only sane investment to their community, even though many of them lack knowledge of investing and rely solely on the advice of these agents. This has resulted in people from these communities showing up with suitcases full of cash at pre-con launches, buying up spots/bribing salespeople at the builder’s office to secure units.
However, investors also have a role in getting condos built. Developers need to presell a minimum amount of condos to get financing, and most of those presales come from investors. Unfortunately, investors have shifted the mindset regarding the pricing of pre-con units, and people pay future prices for pre-cons, which may result in them paying more than the unit is worth in the future.
The text also discusses the challenges that come with pre-cons, such as the uncertainty of completion times, floor plans that are hard to judge, and build quality that is not guaranteed. However, despite these challenges, pre-cons are still seen as a good deal because buyers get a discount on the price and more excellent selection.
In conclusion, the text sheds some light on the issues surrounding the housing market in Canada, particularly the role of investors in pre-con sales. The situation has disadvantaged many Canadians who can no longer afford reasonable prices, and something needs to be done to address it. The Ontario government has introduced a bill to ban assignment sales, and it remains to be seen how effective this will be in addressing the root of the problem.
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Author Eliza Ng