Real estate prices have been skyrocketing in Canada for the past two years in particular. In the recent report by the Canadian Centre for Policy Alternative it states that roughly 80% of Metro Vancouver’s land base is dominated by 35% of it’s housing.
The result is a mixture of detached homes in a quiet neighborhood, disrupted by crowded construction sites every other block. With new development presales popping up every month, each increasingly smaller in size per unit compared to the last.
New presales are getting smaller and smaller, while the prices grow higher and higher, which begs the question.
“Who’s buying these developments?”
Well the interesting thing is that for the constructions for these developments to begin building the buildings must already be 70% – 80% sold through presales. Otherwise developers wouldn’t have been able to get funding from the bank.
Regardless of the size and the price, investors are securing their presales now because they understand the state of the real estate market. The truth is it simply cannot be compared to the market of 10 years ago. They would rather get one foot through the door by purchasing a reliable smaller apartment than hold back and invest in nothing at all.
According to the British Columbia Real Estate Board, the market has slowed down compared to last year. Nevertheless, the prices for real estate are still expected to increase by at least 8% in 2022.
Surrey has grown 10% every year between 2016-2021. Covid-19 Restrictions are letting up and immigration is looking promising this year as well. There are no signs of the city growth slowing down at all.
So the real question you should be asking isn’t “Who’s buying these developments?” but it should be “Why aren’t there more developments?” in light of the growing demand.
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