The Benefits of New Developments in Victoria BC
A pre-sale home or new development provides homebuyers with a great way to enter the real estate market without some of the hassles associated with a previously owned home.
Buying a pre-sale home offers many advantages, but homebuyers should be aware of some of the drawbacks of new construction and work with an experienced agent who can guide them through the process.
Read on to discover everything you need to know about buying a pre-sale home and how it could be the right move for you and your family.
What is a Pre-Sale Home?
Pre-sale homes, also known as pre-construction homes or new developments, are homes available to buy before they’re move-in ready. This usually happens before construction begins or during the early stages of construction.
Oftentimes, pre-sale homes are built in revitalized neighborhoods and give homebuyers the opportunity to set down roots in up-and-coming areas.
This is particularly attractive to first-time home buyers struggling to break into the real estate market or investors looking to expand their real estate portfolio.
Do pre-sale homes interest you already?
Then let’s dive into some of the other advantages of purchasing a new development.
Benefits of Buying a Pre-Sale Home
#1. Find a home in your dream neighbourhood
New developments are often located in up-and-coming neighbourhoods. These neighbourhoods offer a wide range of services, local businesses, and a strong sense of community, while still maintaining their own distinct character and essence.
For example, in Victoria, BC, pre-sale homes in neighbourhoods like Bear Mountain and Royal Bay offer young families the opportunity to live close to the beautiful outdoors on Vancouver Island while accessing schools, grocery stores, and other necessities.
#2. Customize your new home
If you buy a pre-sale home, you won’t have to worry about previous owners damaging the property. You’re also guaranteed a home that meets the most recent construction codes.
In some new developments, you may also be able to work with the developer to customize your home by picking out wall finishes, flooring, or appliances so you feel right at home when you move in.
#3. Save money with your pre-sale home
Each new development has its own deposit structure, usually between 10-20%. But you can spread the payments over the construction phase, which puts a hold on your mortgage and gives you more time to save up for your new home.
Additionally, Canadian citizens and permanent residents who plan to live in their pre-sale home for at least a year are exempt from the property transfer tax on new developments under $750,000.
#4. Freedom to think about your purchase
All new developments in Canada have a 7-day rescission period where you can cancel your home purchase without penalty.
This grace period allows you to take advantage of incredible real estate opportunities when they arise, while also giving you time to think about your decision and ensure it’s the right move.
Disadvantages of Buying a Pre-Sale Home
#1. Waiting for your new development
The most obvious disadvantage of buying a pre-sale home is that it isn’t move-in ready.
Depending on the construction stage, your new home may be 1-3 years away from completion. As with any building process, unexpected delays could also arise and push your move-in date back. So if you’re on a strict timeline, then a pre-sale home may not be the best option for you.
#2. Paying GST for your pre-sale home
While new developments are often priced lower than the current market rate for a new home, they are subject to 5% GST on top of the purchase price.
This GST is to be paid by the time construction is completed. However, rebates are available and an experienced real estate agent can help you navigate the payment process for your pre-sale home.
#3. Imagining your new home
Since your home is not yet constructed, you’ll have to tap into your imagination to envision your future in it.
Even though many new developments offer showrooms or virtual tours to help you visualize your home, you cannot physically walk through a pre-sale home. It’ll take a little bit of creativity to picture where you’ll live.
Hiring a Pre-Sale Real Estate Agent
Even though pre-sale properties offer many benefits, it is important that home buyers consider the drawbacks of a new development before making their next move.
One final feature of a pre-sale home could be either a benefit or a disadvantage depending on the housing market.
While even the most experienced real estate agent can’t tell the future of the real estate market, new developments present an opportunity to build future equity.
Since you’ve locked in the price of your pre-sale home in the early stages, its value could increase during the construction years depending on the market and neighbourhood development.
But, if the market softens during those construction years, you may find that your new home does not have the financial value you expected.
Having a real estate agent who specializes in new developments, like Chantelle Lysyk, on your side can provide expert advice about promotions, incentives, upcoming developments, and the entire process so you feel confident about your purchase.
Chantelle is not only passionate about new developments but also has connections throughout Greater Victoria, which means she’ll help you find your dream pre-sale home in a neighbourhood that’s right for you and your family.