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Canada’s Mortgage Housing Corporation is predicting there will be no housing downturn in Canada.  CMHC is suggesting property sales will be softer next year and prices will be flatter, but no downturn will result.  New housing starts in Vancouver will grow 4% next year.


 “Balanced market conditions in most local housing markets will result in a slowing in house price growth as well,” said Mathieu Laberge, CMCH’s deputy chief economist.
 The average price for a single detached home in the Vancouver region should reach $1.13 million by 2013.  Investors are moving their money and focus away from single family detached homes to the condo market. With prices so high, most people seeking homes will have to look at condo offerings . Others will be forced to rent.

CMHC is a federally funded organization that provides various types of mortgage insurance to protect lenders from the risks of defaults by home buyers. It’s research unit monitors residential construction activity, housing sales and provides market outlooks for various sectors of the economy.

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What is a pre-sale?

Example scenario: When the developer intends to build an apartment building and applies for financing, the bank will grant financing under certain conditions. One of them will likely be a certain percentage of pre-sales the developer will need to secure before receiving the funds.
It is common practice for a developer to approach several real estate investors and offer them an opportunity to purchase units of the non-existent building at a discounted price, and on good terms.

Once the number of pre-sales is accomplished, the developer goes ahead with the construction, which will likely take two years or longer to complete. During construction, their marketing team offers the remainder of the units for sale at market value to the public.

If you are a RE investor, you know that it is preferable to be buying at the pre-sale prices, not market value prices.

The question is, how do you get the invitation to buy a pre-sale?
In the past many years, investors have made substantial income by buying at wholesale prices and selling at retail prices even before they needed to complete their purchase. I saw many of them lining up and sometimes even camping overnight in front of the sales center to get a chance to buy at lower prices, but not everyone was lucky enough. You needed to be well-connected to get an opportunity, and you had to act fast.

Today is a bit of a different story. Several projects in the Lower Mainland and Fraser Valley offer really good prices and incentives to secure a unit now and complete the purchase two or three years later. The list of incentives varies from one project to the next. Besides attractive prices, you can get low deposit amounts (5-15%), low or no assignment fees, free updates, a mortgage rate buy-down program, extra parking and more.

A month ago, I helped a few of my clients purchase a presale in Surrey that sold out in 2 days, and I know of another good developer that will be offering a few units for sale as well.

If you would like to know more about these opportunities, I would encourage you to call or email me, and I’ll be happy to send you details on those projects.
 
Kind regards,
 
Tibor Bogdan
Century 21 Creekside Realty Ltd.
45428 Luckakuck Way #190, Chilliwack, BC V2R 3S9
cell: 604-855-2521
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