Are you intrigued by the headline yet?
It is normal if you are, I would be too.
Almost everyone has a friend or family member who has purchased pre-construction in the past and have bragged about how well they’ve done. Based on my previous writings it is safe to assume that I am bullish on condos and the Downtown pre-construction market. The following story will only reinforce my view regarding the subject.
Earlier this month, the Daniels Corporation launched a new project located in the East end of Downtown Toronto, in a developing neighbourhood called Regent Park. The project is called Artworks and is a 32-storey tower located at the NW corner of Dundas and River Street. Artworks is slated to complete in the summer of 2021. To many agent’s surprise and shock, the builder launched the project at $860 per square foot on average. Some suites were selling for as low as $830PSF. Looking at the latest numbers from our friends at condos.ca (who possess the MOST accurate resale numbers), RESALE Downtown Toronto Condos are selling at an average $973 PSF.
Do you see what I see?
It is typical if not standard to have downtown pre-construction condos priced above market value due to the fact that buyers are essentially paying today for a 2021 price. By doing so they are betting on the market to go up and surpass the builder initial premium.
In the case of Artworks, 300 lucky purchasers locked in at a price which is already below market value! This is both shocking and fantastic at the same time. If you or anyone you know purchased at the Artworks Tower in Regent Park it is safe to assume that just by putting pen to paper they have already made in excess of $50,000 in a single day… (assuming a suite square footage of 500)
Needless too say the response Daniels received has been tremendous and the Artworks tower is now sold out.
Pre-construction opportunities like this are rare, but can be found. Lesson of the day – be proactive and continuously look for good investment opportunities.
PS. The simple profit calculation above does not attempt to predict the condo prices in 2021. It is based on todays numbers. If you were to ask me what I think the average resale PPSF in downtown Toronto will be in 2021… my conservative estimate is $1,100-$1,200PSF.
If this turns out to be true, the potential profit would be $175,000 on a 500sq.ft. condo.