I’ve spoken about FOMO in the past, and let me tell you it is not only reserved for the newest fad, fashion or electronics; it absolutely exists in real estate also. Fear of Missing Out is driving a spike in new condo sales. These are units that have yet to break ground (PreCon) or those that are still under construction. With some people panicking that they were not able to secure a house or existing condo in this past year, they are purchasing essentially any kind of property they can get their hands on. As a result, new condo sales are booming in most urban centres across Canada.
With attractive payment plans spread out over a longer period of time, and incentives Buyers have the luxury of time to come up with their downpayment, so for many this is a no-brainer. Specifically younger buyers that otherwise feel they have been priced out and do not have a shot at becoming a homeowner, PreCon has allowed them an opportunity to get into the market.
With many Buyers feeling shafted from Real Estate and dejected because they could not secure a property in the past year, and with prices consistently rising (and no expectation of a correction or cooling anytime in the next few years), this sense of FOMO has significantly impacted urban centers. Precon sales are up. I do caution though, the average per square foot cost of PreCon units in Toronto alone is upwards of $1400/psf, so it is critical to understand costs and how that will impact your monthly mortgage and condo fee payments. At these prices, the likelihood of banking on this investment as cash flow positive is zero. It is imperative to do your homework, talk to a real estate professional and then make a decision that makes sense for you financially.