There’s a lot of talk right now about the fiery-hot, speculative, under-siege housing market in Vancouver, and for the first time in my life I’ve got skin in the game.
Last summer I had the overwhelming urge to buy an apartment, and after finding an agent and looking at three old apartments and one insanely-tiny new apartment (it had one storage spot in the entire “townhouse” and that was a shelf in the one closet in the one bedroom—not even an entryway closet for coats!) my Realtor recommended going pre-sale (buying on spec and hoping like hell you’ll like it) and we found a two-bedroom plus den. It had no presentation centre (“we’re passing on those savings to you, the homebuyer”) and one main rendering available for all floorplans to show what kind of condo to expect.
Advantages to buying pre-sale:
- Price. Because it’s not built yet, pre-sale condos are typically cheaper than what’s currently on the market. For example, in our price range there were a ton of ’70s-’90s one-bedroom apartments, but none right in our desired area of Mount Pleasant (damn that Bob Rennie calling Main and Broadway the new centre of town!). Anything that was affordable was, in a word, “risky.” Candidates for rain-screening, old places with wall-damaging saunas and decades of smoke in the halls, and who knows what other disasters lurking beyond an inspection and strata minutes. For a first-time homebuyer, I can’t afford to buy a place that’s about to be re-assessed for repairs up the you-know-what and tack on thousands of dollars to my mortgage. This brings me to advantage #2.
- Warranty. If you buy a new home, it has three different types of warranties on it, including a 10-year structural. I saw this one renovated place on Ontario and 14th, PRIME location, with this gorgeous big party-perfect patio right off the living room, but it was in a building that was old AF with single-pane windows, water-damaged paint on the outside and dank, ’70s carpets inside. Sans bike room tenants reportedly house bikes in their parking spot in front of their cars. Plus it smelled like smoke everywhere in the building. My aunt took one look at my hopeful “we’ll take it!” face and said it was an absolute dud that would cost me tons in future repairs. Note: When shopping for your future home and looking to make the largest financial investment of your life, it’s good to have one of these no-nonsense realists at your side.
- New new new NEW! I’ve never owned, I’ve always rented, and I’ve rented the oldest, most questionable, least street-legal spots in all of Vancouver, so to be in a place with pristine tiles and ledges that have never seen a spec of dust (let alone decades of renter neglect) is an absolute dream. Side story: I once rented a bachelor suite on Bute and Davie that was in this 100-year-old hotel (the yellow building by the dog park, movies have been filmed there and everything!). At first I was taken in by its old-timey charm, but there was a hole in my ceiling that used to POUR bathwater from the apartment’s shower above. I shudder to think of the black mold in that place. Happy my brother and I (both willing occupants for multiple years) got out alive.
- Make Money-Money. Buying something you can’t see is terrifying, but even in the few months my new condo building was open for sales, the prices went up 10%. So even if we hate our new place (fingers crossed not) we could always sell it and make a profit. Barring a tsunami, mega earthquake or the bottom falling out of the Vancouver housing market because of newly imposed restrictions on foreign ownership.
- New-Place Extras. Most of the old apartments in Mount Pleasant/East Van/Fraserview don’t come with in-suite laundry, nor do they have the space/strata say-so to put one in. A lot don’t have a dishwasher either. I currently live without both and struggle every day. Our new place HAS BOTH and will also have a patio (!!!!). It’s 3-feet deep, but STILL. Forgot to mention new place also has a bike room, so we no longer have to store our wheels in the apartment.
- Pet-friendly. I’m not sure if this is with all new builds, but no matter what our future strata decides in terms of rules, we’re allowed one dog (no size restriction) and one cat! The people we sell it to will inherit those same perks too, which is a good selling point. We’re also able to rent our place, regardless of strata bylaws, so it could always be an income property should we turn into mad housing ballers.
There are of course disadvantages to going pre-sale.
I have looked at so many apartments online that seem great, and then you look closer at the photos and you’re like, “Why did they put that pole there?” “Why is there a solarium between the living room and the view?” “Who thought that triangle-shaped rooms were a good idea?” I wouldn’t buy a new dress without seeing it first, so in that respect spending $300K on a pre-sale home is effing insane.
- Time. Time is money, and the minimum wait for a pre-sale is around two years. Construction typically won’t start until they’ve sold out or mostly sold all the units and it can also be held up for ridiculous unforeseen reasons. Breaking ground was delayed on our place for eight or nine months because of a hydro pole the city wouldn’t take down. Instead of moving in later this year, we’re looking late spring 2017.
- GST. For some reason, you have to pay 5% GST when you buy a new home. This sort of takes the edge off the savings you get from buying pre-sale in the first place, as it can be like $20,000. First-time homebuyers get some money back, but it’s like $750. What’s that pay for? A notary appointment? Half a rug?
- Fluctuating Specs. I was alarmed to hear from my Realtor that things aren’t built exactly to the floorplan. They can swap subway tiles for penny tiles based on availability, they can put in a sliding door instead of a swinging one and they can SHORT YOUR SQUARE FOOTAGE. Step into my nightmare for a minute: our new apartment’s living room is just under 10-feet wide. TINY. How can it be cool for them to build my condo and short me even a foot? Two feet? An actual shoebox. I would be able to lie down end-to-end and touch the walls. Realtor says it could go the other way, and actually get bigger. Ha! Snowball’s chance in hell.
The delay in time has also given me much more time to stress about whether or not we made the right decision, so to quell some of my fears, I thought I’d mock-up a virtual model. That post coming soon!