{"id":21464,"date":"2023-03-06T11:11:00","date_gmt":"2023-03-06T19:11:00","guid":{"rendered":"https:\/\/www.roryc.ca\/blog\/?p=21464"},"modified":"2023-03-03T10:15:20","modified_gmt":"2023-03-03T18:15:20","slug":"opportunity-to-buy-real-estate-without-being-affected-by-higher-interest-rates-pushing-more-homebuyers-to-presale-market","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2023\/03\/opportunity-to-buy-real-estate-without-being-affected-by-higher-interest-rates-pushing-more-homebuyers-to-presale-market\/","title":{"rendered":"Opportunity to Buy Real Estate Without Being Affected by Higher Interest Rates Pushing More Homebuyers to Presale Market"},"content":{"rendered":"<p style=\"text-align: justify;\">The opportunity to lock in a real estate investment for the future while avoiding the impact of today\u2019s higher interest rates is pushing more buyers into the presale market, says one expert.<\/p>\n<p style=\"text-align: justify;\">\u201cHomebuyers do believe that presale is a strong opportunity today. And they believe that because they can lock in today&#8217;s price, and they can avoid today&#8217;s interest rate,\u201d said Ryan Lalonde, president and partner of MLA Canada.<\/p>\n<p style=\"text-align: justify;\">The real estate service provider predicts that presale activity in the first two quarters of 2023 will be lower than the record highs seen in 2021 and 2022.<\/p>\n<p style=\"text-align: justify;\">However, this will be \u201cviewed positively\u201d when compared to the low sales activity and negative sentiment of the second half of 2022, MLA Canada said in a market analysis released March 2.<\/p>\n<p style=\"text-align: justify;\">In the coming year, MLA Canada forecasts that there will be 95 presale program launches, which will bring a total of roughly 11,000 units to the market. Of this total, it is predicted that there will be 4,300 concrete, 4,950 wood frame and 1,750 townhome units.<\/p>\n<p style=\"text-align: justify;\">\u201cWhat&#8217;s been really interesting is that over the last 12 months, as we&#8217;ve seen market corrections primarily tied to post COVID-19 and interest rate adjustments, there&#8217;s been a shift in demand away from resale towards presale transactions,\u201d Lalonde said.<\/p>\n<p style=\"text-align: justify;\">One of factors driving this shift in sentiment is a lack of supply in the resale market, he said.<\/p>\n<p style=\"text-align: justify;\">Taylor Biggar, chairman of the Real Estate Board of Greater Vancouver (REBGV), described Metro Vancouver\u2019s housing market as \u201csignificantly undersupplied\u201d in his organization\u2019s latest monthly report.<\/p>\n<p style=\"text-align: justify;\">Last month\u2019s home sales totalled approximately 1,808 \u2013 33% below the 10-year February sales average, according to the REBGV\u2019s report.<\/p>\n<p style=\"text-align: justify;\">Of the presale units that will hit the market this year, MLA Canada predicts 45% of released inventory will be absorbed by 2024, according to its latest market report.<\/p>\n<p style=\"text-align: justify;\">\u201cHomebuyers are not finding access to supply in the resale marketplace and then are considering presale as an alternative. And that&#8217;s been really driving price points and driving absorption in the presale marketplaces,\u201d he said.<\/p>\n<p style=\"text-align: justify;\">As a result, the gap between presale and resale pricing has been growing in certain markets, according to Lalonde.<\/p>\n<p style=\"text-align: justify;\">\u201cThat&#8217;s quite surprising to us, given the fact that you have what seems to be some strong headwinds and certainly lower buyer sentiment in today&#8217;s marketplace than what we&#8217;ve seen in the past. But still, people believe that the future value of a new home is higher than what a comparable resale home would be transacting for in any general marketplace.\u201d<\/p>\n<p style=\"text-align: justify;\">When it comes to the success of a presale, real estate agent Jesse Klein said that presale projects priced 15% &#8211; 20% over resale are struggling to hit their sales targets. He described the current premium for presale as \u201ccrazy high.\u201d<\/p>\n<p style=\"text-align: justify;\">\u201cIf they lower it to maybe 5% or 10% above resale, then they&#8217;re getting a lot of activity, and they&#8217;re actually making a lot of sales,\u201d he said. \u201cIt really depends on where you&#8217;re priced. There&#8217;s a pretty huge discrepancy between well priced projects, and then those that are asking quite a bit above the resale market. So, last year, you could ask 20% over resale and still sell out but it\u2019s definitely not the case right now.\u201d<\/p>\n<p style=\"text-align: justify;\">In the short term, Lalonde sees the impact of this shift in buyer sentiment resulting in less pressure on resale pricing as more buyers look to presale as an alternative.<\/p>\n<p style=\"text-align: justify;\">\u201cI think what you&#8217;re going to continue to see is strong demand for presale and strong pressure on presale to be able to fill in whatever the resale marketplace is unable to fill,\u201d he said.<\/p>\n<p><a href=\"https:\/\/biv.com\/article\/2023\/03\/homebuyer-sentiments-shifting-favour-presale-market-mla-canada\" target=\"_blank\" rel=\"noopener\">MLA Canada : Homebuyer Sentiments Shifting in Favour of Presale Market<\/a> by Claire Wilson | BIV<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The opportunity to lock in a real estate investment for the future while avoiding the impact of today\u2019s higher interest rates is pushing more buyers into the presale market, says &hellip; [<a href=\"https:\/\/www.roryc.ca\/blog\/2023\/03\/opportunity-to-buy-real-estate-without-being-affected-by-higher-interest-rates-pushing-more-homebuyers-to-presale-market\/\">read more<\/a>]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[],"class_list":["post-21464","post","type-post","status-publish","format-standard","hentry","category-real-estate"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.7 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Opportunity to Buy Real Estate Without Being Affected by Higher Interest Rates Pushing More Homebuyers to Presale Market &#8226; Rory C Real Estate | Oakwyn Realty<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.roryc.ca\/blog\/2023\/03\/opportunity-to-buy-real-estate-without-being-affected-by-higher-interest-rates-pushing-more-homebuyers-to-presale-market\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Opportunity to Buy Real Estate Without Being Affected by Higher Interest Rates Pushing More Homebuyers to Presale Market &#8226; 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